UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 2000
Commission file number 1-10984
BURLINGTON INDUSTRIES, INC.
------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 56-1584586
--------------------- ---------------------
(State of incorporation) ( I.R.S. Employer
Identification No.)
3330 West Friendly Avenue
Greensboro, N.C. 27410
----------------------------- ----------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (336) 379-2000
------------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- -------------------------
Common Stock, New York Stock Exchange
par value $.01 per share
Securities registered pursuant to Section 12(g) of the Act: None
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
----- ------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of December 4, 2000, the aggregate market value of Registrant's voting stock
held of record by nonaffiliates of Registrant was approximately $70,600,278
(based upon the closing composite price on the New York Stock Exchange on that
date), excluding Treasury shares and, without acknowledging affiliate status,
730,091 shares held beneficially by Directors and executive officers as a group.
As of December 4, 2000, there were outstanding 52,075,748 shares of Registrant's
Common Stock, par value $.01 per share, and 454,301 shares of Registrant's
Nonvoting Common Stock, par value $.01 per share.
Documents Incorporated by Reference
Portions of Registrant's 2000 Annual Report to Shareholders are incorporated by
reference into Parts I, II and IV hereof.
Portions of Registrant's Proxy Statement dated December 22, 2000 in connection
with its Annual Meeting of Stockholders to be held on February 1, 2001 are
incorporated by reference into Part III hereof.
<PAGE>
PART I
Item 1. Business
General
The Corporation is one of the world's largest and most diversified
manufacturers of softgoods for apparel and interior furnishings. It is a leading
developer, marketer and manufacturer of fabrics and other textile products used
in a wide variety of apparel and interior furnishings end uses. The Corporation
is organized in three industry segments: PerformanceWear, CasualWear and
Interior Furnishings. References herein to the "Corporation" mean Burlington
Industries, Inc. ("Burlington") and its subsidiaries, and, where relevant, its
participation in joint venture companies.
During the 1999 fiscal year, the Corporation announced and implemented
a comprehensive reorganization plan primarily related to its apparel fabrics
businesses. The principal components of the plan included the combination of its
apparel fabrics related businesses into two units (Burlington PerformanceWear
and Burlington CasualWear) and the reduction of its U.S. apparel fabrics
capacity by approximately 25% by closing plants and streamlining production
within remaining facilities. See Management's Discussion and Analysis of Results
of Operations and Financial Condition - "1999 Restructuring and Impairment", and
Note B of the Notes to Consolidated Financial Statements in the Corporation's
2000 Annual Report to Shareholders.
During September, 2000, the Corporation approved a plan (the "2000
Restructuring") to strengthen its future profitability and financial flexibility
by addressing performance shortfalls, as well as difficult market dynamics. Key
elements of the Plan include reducing operating capacity to better align
operations with current market demand and to assure the most efficient use of
assets; the elimination of unprofitable businesses, including PerformanceWear's
garment manufacturing operations in Mexico and the tufted area rug component of
Burlington House Floor Accents; reductions in administrative and staff overhead
positions; and the generation of cash through the sale of assets, reduced
working capital and decreased capital expenditures to reduce debt and improve
financial flexibility. The Plan is discussed in detail in "Management's
Discussion and Analysis of Results of Operations and Financial Condition" in the
Corporation's 2000 Annual Report to Shareholders and in Note B of Notes to
Consolidated Financial Statements.
As of September 30, 2000, the Corporation operated 21 U.S.
manufacturing plants in five states and five manufacturing plants and two
garment assembly plants in Mexico. It also held a 50% interest in three joint
ventures: one in India with one manufacturing plant and two in Mexico, each with
one manufacturing plant, and held a minority interest in a U.S. yarn
manufacturing venture. It also has increased to 51% its ownership interest in
Nano-Tex, LLC, a California limited liability company ("Nano-Tex") engaged in
research activities directed to enhancing the performance characteristics of
textile products. At September 30, 2000, the Corporation employed approximately
17,900 persons, not counting joint venture employees.
Credit Facilities Extension
On December 5, 2000, the Corporation entered into an amended and restated
Credit Agreement with the lenders in its 1995 Credit Agreement. See
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" in the Corporation's 2000 Annual Report to Shareholders. The
extension of the credit facility for up to two and one-half years provides to
the Corporation significant liquidity during this period, but also subjects the
Corporation to increased borrowing costs and the collateralization of
substantially all of its U.S. assets (other than accounts receivable) to secure
the amended facility. The added costs of the amended facility and much more
stringent financial and negative covenants therein will limit the Corporation's
flexibility during the period that this Agreement is in effect.
Products for Apparel Markets
Burlington PerformanceWear. The Corporation is a leading manufacturer of
woven worsted and worsted blend fabrics, as well as woven synthetic fabrics made
with 100% polyester, 100% nylon and polyester or nylon blended with wool, rayon,
lycra or other fibers, supplied to manufacturers of a wide variety of apparel,
activewear and barrier products. Burlington PerformanceWear is organized to
service the needs of seven distinct customer groups:
o Menswear - Clothing: Fabrics of worsted wool, synthetics and blends
designed for the increasingly diverse needs in men's jackets, suits and
formal wear.
o Menswear - Trousers: Fabrics across the fiber spectrum for use in men's
slacks and shorts, from business to casual application.
o Womens Wear: A breadth of fabric styles for a wide variety of end-uses in
the "moderate" and "better" women's market.
o Raeford(R): An extensive product line, from tailored fabrics to
performance fabrics, for uniform and career apparel.
o ActiveWear: High-tech, performance fabrics with waterproof, water
repellent, breathable and moisture management characteristics used by
makers of outerwear and high performance sportswear and activewear.
o Shirtings: Yarn dyed woven cotton shirting fabrics, delivered in fabric
form or the finished shirt, tailored to customer specifications.
o Barrier Products: Performance fabrics for the reusable health care market
and contamination control environments. Lightweight, reusable, protective
barrier fabrics under the Maxima(R) brand name are marketed to makers of,
among other things, clothing worn by hospital personnel and by industrial
workers who are required to work in clean and static-free environments.
As part of its strategy to focus more resources on the finished product
end of the softgoods pipeline, the Corporation disposed of the assets of its
Burlington Madison Yarn division in 1998 - 1999. The division was a major
supplier of textured and spun synthetic yarns. The Corporation entered into
long-term yarn supply agreements with the acquirers of these assets.
Burlington CasualWear. The Corporation is a leading manufacturer of denim
fabrics, focusing on fashion, value-added, specialty products. It produces a
diversified product line that services the major brands with innovative and
engineered products for denim customization. From plants in the United States,
Mexico and India, it is a major supplier to all segments of the branded,
designer and private label business. The India denim plant is a 50/50 joint
venture with Mafatlal Industries Limited, and the Mexico cotton yarn plant is a
50/50 joint venture with Parkdale Mills Incorporated.
During 2000, each of the apparel fabric businesses offered customers the
option of purchasing fabrics in the form of customer-specified garments through
direct garment-making capabilities in Mexico or through the purchase of sewing
services from contractors or joint ventures. By the end of fiscal 2000, the
Corporation owned in Mexico a jeans sewing plant and a slacks sewing facility,
as well as its 50/50 joint venture ownership with International Garment
Processors in a new jeans finishing facility in the State of Chihuahua, Mexico.
As part of the 2000 Restructuring, the Corporation decided to terminate its
garment-making capabilities in PerformanceWear and to sell the slacks-making
facility.
Products for Interior Furnishings Markets
Fabrics and related products. The Corporation is a leading manufacturer of
ready-made and made-to-measure draperies, window coverings and coordinating
bedroom ensembles, mattress ticking, upholstery fabrics, and decorative fabrics
for use by makers of products for the home, office, hospitality and healthcare
markets.
The product lines consist of:
o ready-made and made-to-measure draperies, window coverings and
coordinating bedroom ensembles, and table linens sold under the
Burlington House(R) name to department and specialty stores, under
the American Lifestyle(TM) name to discount stores and on a private
label basis to several major retailers;
o woven jacquard mattress ticking (primarily damasks) sold to all
major domestic manufacturers of mattresses for both the residential
and institutional markets;
o woven jacquard and textured fabrics for residential upholstered
furniture which are marketed to a broad range of furniture
manufacturers; and
o woven jacquard and other decorative fabrics and flame resistant
fabrics used by manufacturers of home, office, hospitality and
healthcare products (bedding, window coverings, draperies, panel
fabric and upholstery fabric).
Floor Accents. The Corporation produces tufted area and bath rugs for home
use, sold primarily under the Burlington House(R) name to department and
specialty stores and the American Lifestyle(TM) name to discount stores. It is a
leading producer of printed accent rugs and welcome mats sold under the
Bacova(R) name. It markets these products, in addition to fully coordinated bath
ensembles, to diverse market segments that include the leading U.S. department
stores, mail order catalogs, mass merchants, specialty stores and international
customers.
As part of the 2000 Restructuring, the Corporation decided to exit the
unprofitable tufted area and bath rug business and announced the closing of its
Monticello, Arkansas plant. The Corporation also engaged an investment firm to
advise on the sale of the Bacova portion of this business. Negotiations to sell
these businesses continue as of the date of this Report.
Carpets. The Corporation is a leading domestic manufacturer of tufted
synthetic carpet for commercial uses, comprised of broadloom carpet, carpet
tiles and six-foot vinyl-backed carpet. It produces and sells a wide variety of
standard and custom commercial carpet products under the Corporation's Lees(R)
brand name primarily for use in offices, institutions, airports, hotels,
schools, stores and health care facilities. The Corporation's commercial carpet
products are sold in the middle to high priced segments of the commercial carpet
market, and are marketed through dealers primarily to architects, designers and
commercial builders, as well as directly to end users.
The Corporation developed and patented a yarn dyeing process that permits
the production of carpeting that resists staining and fading on a permanent
basis. Products incorporating this dyeing technology, which are marketed under
the Duracolor(R) name, represent a substantial portion of current carpet sales.
The Corporation also has developed and markets a proprietary thermoplastic
carpet backing process for commercial carpets, known as Unibond(R), which
enhances the carpet's durability.
The Corporation's yarn dyeing capability facilitates the offering of
carpeting in a wide range of colors. Through its Colorfax(R) program, the
Corporation offers customers the ability to order sample yardage manufactured to
their exact color specifications. In addition, the Corporation offers high
quality digital product simulations, known as Techno-Images (TM). These provide
customers with custom design and color direction and are marketed by the
Corporation under it's Accelerated Design System (ADS)(TM). Techno-Images(TM)
are deliverable within 48 hours of request.
Financial Information Concerning Industry Segments
Reference is made to Note O to the Notes to Consolidated Financial
Statements in the Corporation's 2000 Annual Report to Shareholders, which is
incorporated herein by reference, for information concerning industry segments
for the Corporation's 2000, 1999 and 1998 fiscal years.
Exports
The Corporation's exports were 11.1% of revenues in fiscal year 2000, with
export sales of $179.1 million; of these sales, $96.4 million were to Mexico and
Canada. The Corporation's export sales were $236 million in fiscal year 1999 and
$236.9 million in fiscal year 1998.
Operations
The Corporation's domestic operations are organized primarily by product
category. Products are distributed through direct sales except in a few cases,
mainly export sales, where products are sold through independent agents or
distributors.
The Corporation's operations in Mexico, directly owned or through joint
ventures, are designed primarily to service markets outside of Mexico. These
operations benefit from the quota, tariff and tax advantages of the North
American Free Trade Agreement (see "Competition" below) and Mexico's
"maquiladora " program.
The Corporation's corporate headquarters, principal sales and
merchandising offices and principal staff operations are located in Greensboro,
North Carolina. The Corporation maintains domestic sales offices in New York
City and other major cities in the United States.
Manufacturing
The Corporation is a vertically integrated manufacturer in many of its
product areas. Generally, raw fibers are purchased and spun into yarn, or
filament yarns are purchased and processed. Yarns, whether produced by the
Corporation or purchased, are dyed in some cases, and then are woven, or tufted,
into fabric or carpet. Fabric is then sold either as greige (unfinished) goods
or in dyed and finished form, or further processed into finished home furnishing
or apparel products. Residential and commercial interior furnishings products
are further processed and packaged for sale to retailers.
"Just-in-time" manufacturing techniques, which reduce in-process
inventories, floor space requirements and the time required to process a
particular order, are used in most facilities. Programs to link customers and
suppliers of the Corporation by means of electronic data transmission or the
Internet are also in place in all businesses. These programs improve efficiency
and reduce lead times by improving communication and planning and processing
times at the various stages of production. They also assist the Corporation in
working effectively with manufacturers to coordinate their operations with the
demands of retailers and, as such, are an important part of the domestic textile
industry's "Quick Response" program designed to improve its competitive position
vis-a-vis imports. The Corporation is placing increased emphasis on continuous
improvement of its manufacturing processes.
Raw Materials
The Corporation uses many types of fiber, both natural (principally wool
and cotton) as well as manufactured (polyester, nylon, polypropylene, acrylic,
rayon, Tencel(R) and acetate), in the manufacture of its textile products. Total
raw material costs were 33.4% of net sales in the 2000 fiscal year, 30.4% of net
sales in the 1999 fiscal year and 34.1% of net sales in the 1998 fiscal year.
The Corporation believes that future price levels for all fibers will depend
primarily upon supply and demand conditions, general inflation, U. S. and
foreign government fiscal policies and agricultural programs, relative currency
values, and prices of underlying raw materials such as petroleum.
The Corporation purchases all of its raw materials and dyes, and,
generally, has had no difficulty in obtaining these materials. Wool and man-made
fibers are available from a wide variety of sources both domestically and
abroad. Cotton is available from a wide variety of domestic sources. Other
materials, such as dyes and chemicals, are generally available, but, as in the
case of raw materials, continued availability is dependent to varying degrees
upon the adequacy of petroleum supplies.
Research and Development
Textile manufacturers generally focus their research and development
efforts on product development rather than basic research. Major innovations in
the textile industry have come primarily from fiber producers (microdenier
fiber, for example) or machinery manufacturers (high speed shuttleless looms).
While breakthroughs by textile manufacturers in fabric development have occurred
(for example, the Corporation's Duracolor(R) carpets using stain-resistant
technology), generally, textile makers have enhanced their competitiveness
through continual development and refinement of products to meet or create
consumer needs (for example, the Corporation's use of microdenier fibers in a
wide range of apparel and other applications). Accordingly, with few exceptions,
basic research and development expenditures have not been as significant a
component of textile manufacturing success as expenditures on design innovation
or capability and on capital equipment that increase the range of end products
and enhance productivity.
The Corporation is a leader in developing new applications and end uses
for synthetic fibers, such as fabrics made with microdenier filament yarn, a
yarn made from fiber thinner than silk. These products combine a natural
appearance and touch with the performance characteristics of synthetic fibers.
The Corporation's microdenier fabrics are currently being used in men's and
women's apparel fabrics, activewear, protective medical clothing and in home
furnishings. The Corporation is the leading domestic producer of microdenier
fabrics made from 100% polyester and polyester blended with wool or rayon.
Basic research and development responsibility is located in each product
area and focused on specific process and product development needs. Total
expenditures for research, product development, productivity enhancements,
enhanced styling and market samples aggregated $47.8 million in the 2000 fiscal
year, $50.9 million in the 1999 fiscal year and $58.9 million in the 1998 fiscal
year. Included in these amounts are research and development expenditures which
totaled $11.8 million in the 2000 fiscal year ($6.7 million in the
PerformanceWear segment, $1.5 million in the CasualWear segment and $3.6 million
in the Interior Furnishings segment), compared with $12.1 million and $14.9
million in the 1999 and 1998 fiscal years, respectively.
In November 1999, the Corporation increased its ownership interest to 51%
in Nano-Tex, LLC (formerly AvantGarb, LLC), a California start-up company
developing novel chemistry directed to enhancing the performance characteristics
of textile products. Nano-Tex operates a research facility in Emeryville,
California with 11 scientists engaged in research activities. The Corporation
believes that the application of Nano-Tex's research to the next generation of
textile products is potentially very promising but remains highly experimental
at this point. Research and product development to date have been focused on
providing existing products with enhanced performance characteristics for use in
the apparel and home furnishings markets. The Corporation currently expects that
products incorporating Nano-Tex technology will be offered to customers of
consumer apparel products during the first six months of 2001.
Trademarks and Patents
The Corporation owns or has the right to use all trademarks and tradenames
that it believes are material to the operation of its business. The Corporation
markets its products under a variety of trademarks and tradenames, principally
utilizing variations of the Burlington(R) name. Certain products are marketed
under nationally recognized names such as Lees(R) for commercial carpets,
Klopman(R) for fabrics or Bacova(R) for mats and rugs.
From time to time, the Corporation's product development efforts have
resulted in new processes or products, some of which have been patented.
Examples of Burlington-developed technology include the Xalt(R) family of
composite, laminate fabrics used in activewear and Duracolor(R) carpets,
manufactured using stain-resistant technology with respect to which the
Corporation has obtained patents. Because the Corporation's business is not
dependent to any significant degree upon patents and licenses (with the
exception of the patented stain resistant carpet technology in the case of the
interior furnishings segment), the loss of any patents or licenses now held by
the Corporation would not have a material adverse effect upon its business or
results of operations.
To date, Nano-Tex has filed 44 patent applications on a series of
inventions in a number of improvement fields applicable to textiles. It has also
filed for trademark registration of its name and various derivations thereof
using the "Nano" prefix. There can be no assurance as to the extent to which
these registrations and applications will result in registered trademarks and
issued patents, although the Corporation's patent counsel believe that a
significant intellectual property portfolio will result from these filings.
Under agreements with Nano-Tex, the Corporation has the exclusive right to use
on a perpetual basis and favorable license terms, all technologies developed
which apply to textile fields practiced by the Corporation. In addition, the
Corporation is committed to represent Nano-Tex in exploiting all of its
technology in the textile field, including areas where the Corporation is not
presently a manufacturer.
The Corporation derives licensing income (approximately $2.9 million in
the 2000 fiscal year) from licenses of the Corporation's technology and from
licenses of the Burlington(R) name, principally to manufacturers of socks and
hosiery products in the United States and Europe.
Competition
The global and United States textile industries are highly competitive. No
one firm dominates the United States market, and many companies compete only in
limited segments of the textile market. Certain of the Corporation's products
also compete with non-textile products. Textile competition is based in varying
degrees on price, product styling and differentiation, quality, response time
and customer service. The importance of each of these factors depends upon the
needs of particular customers and the degree of fashion risk inherent in the
product. The apparel fabrics divisions' offering of fabrics in garment form puts
the Corporation into competition with a global array of highly-competitive
garment makers.
Imports of foreign-made textile and apparel products are a significant
source of competition for most sectors of the domestic textile industry. The
U.S. Government has attempted to regulate the growth of certain textile and
apparel imports through tariffs and bilateral agreements which establish quotas
on imports from lesser-developed countries that historically account for
significant shares of U.S. imports. Despite these efforts, imported apparel,
which represents the area of heaviest import penetration, represents in excess
of 85% of the U.S. market. However, as noted below, the fastest growth in recent
years has come from Mexico and Caribbean countries, which can benefit U.S.
producers.
U.S. retailers' and apparel manufacturers' sourcing decisions are affected
by numerous factors, including relative labor and raw material costs, lead
times, political instability and infrastructure deficiencies of newly
industrializing countries, fluctuating currency exchange rates, individual
government policies and international agreements regarding textile and apparel
trade, particularly those setting quota and tariff levels. As evidence of the
impact of these factors, sourcing of textile and apparel imports for goods
shipped into the United States -- once dominated primarily by Hong Kong, Taiwan
and Korea -- has been shifting to other lower-cost producer countries such as
The People's Republic of China, Bangladesh, Pakistan, Mexico and countries in
the Caribbean Basin. The Corporation believes that changing cost structures,
delivery lead times, political uncertainty and infrastructure deficiencies
associated with many of these producers have caused importers to reassess the
degree of reliance placed upon certain of these sources, and to reconsider the
importance of the reliability of manufacturing sources closer to point of sale
which can satisfy retailers' rapid replacement/response needs. In addition to
these factors, the U.S. Government's policies designed to benefit Mexico and the
Caribbean Basin, through favored quota and tariff treatment, have accelerated
the shift in production of garments to sources in the western hemisphere,
indirectly benefiting U.S. textile producers.
Under the North American Free Trade Agreement ("NAFTA") with Mexico and
Canada, there are no textile and apparel quotas between the United States and
either Mexico or Canada for products that meet certain origin criteria. Tariffs
among the three countries are either already zero or are being phased out.
Because the Corporation is a major U.S. apparel fabrics manufacturer and a
resident, diversified textile and finished product manufacturer in Mexico, the
Corporation believes that NAFTA is advantageous to the Corporation. In addition,
the U.S. "807" tariff program benefits U.S. textile producers whose cut fabrics
are incorporated into garments assembled in Caribbean countries before returning
to U.S. markets, where duty is charged on only the value added in assembling the
garments.
The impact of the economic factors and legislative/treaty provisions
described above are apparent in the rapid growth of U.S. apparel imports from
the Caribbean Basin, Canada and Mexico. Apparel imports from these countries
have grown from 6.5% of total apparel imports in 1984 to approximately 40% in
2000, surpassing imports from the Far East. Mexico has now become the largest
exporter of apparel to the U.S., surpassing China.
During 2000, legislation was passed relating to trade between the U.S. and
Sub-Saharan African nations, trade between the U.S. and the Caribbean Basin
countries, and reduction of U.S. wool fabric tariffs (the "2000 Trade
Amendments"). Of these changes, only the requirements that Caribbean countries
use U.S.-made fabric to obtain favorable trade concessions would be of benefit
to the Corporation. Since these provisions became effective after the end of the
fiscal year, it is difficult to predict their ultimate net impact on the
Corporation.
Also of significance to domestic textile and apparel companies is the
ultimate impact of multilateral agreements intended to liberalize global trade.
The World Trade Organization ("WTO") established under GATT in January 1995 has
responsibility for overseeing international trade in manufactured goods,
agriculture, intellectual property and services. The WTO will oversee the
phaseout of textile and apparel quotas over a ten-year period through 2004. In
addition, tariffs on textile and apparel products will be reduced (but not
eliminated) over the same ten-year period. After the end of the ten years,
textile and apparel trade would revert to regular GATT rules that would prohibit
quotas and most other non-tariff barriers. The Clinton Administration has also
engaged in discussions with a number of countries or trading blocs with the
intent of further liberalizing trade, although "fast track" authority to
negotiate new agreements was denied by Congress. The Administration recently
announced an agreement with China (which has received Congressional approval) to
facilitate its admission to the WTO and access to the more liberal trade regime
currently being phased in. It is expected that China will obtain the full
benefits of the WTO liberalization in the textile/apparel field on January 1,
2005. The Administration has also entered into a free trade agreement with
Jordan and proposed similar agreements with Chile and Singapore.
Over the years, the Corporation has attempted to offset the negative
impact of increased imports by focusing on product lines and markets that are
less vulnerable to import penetration and by increasing production in lower cost
countries. Capital expenditures and systems improvements have centered on
strengthening value-added product strategies and on increasing productivity,
lowering costs and improving quality. The Corporation also has introduced
manufacturing techniques such as "just-in-time" and "Quick Response" and created
electronic data links with customers and suppliers, thereby shortening lead
times and improving service. The Corporation has invested in yarn, apparel
fabric and garment manufacturing and processing facilities in Mexico and India
in response to the forces affecting global textile and apparel trade which have
been described above.
The long-run success of the Corporation will be influenced in varying
degrees by its response to legislation and administrative actions restricting or
liberalizing trade among world textile producing and consuming countries such as
NAFTA, the 2000 Trade Amendments and the GATT/WTO changes, the effectiveness of
anti-dumping and countervailing duty remedies and of enforcement activities by
the U.S. Government, the value of the United States dollar in relation to other
currencies and world economic developments generally. The Corporation's success
also will be affected by the ability of certain of the Corporation's customers
to remain competitive, the success of the Corporation's global diversification,
modernization and cost-reduction efforts and, most importantly, the ongoing
ability of the Corporation to produce innovative, quality products to satisfy
specific customer needs at competitive costs. The Corporation's exclusive right
to commercialize Nano-Tex's future product applications, if and when achieved,
could provide it unique market opportunities.
Employees
The number of persons employed by the Corporation in both its domestic and
foreign operations, excluding joint ventures, as of September 30, 2000, was
approximately 17,900. The Corporation's workforce in the United States is not
represented by labor unions. All wage employees in the Corporation's Mexican
operations (approximately 3,500 persons) and in its Mexican joint ventures are
represented by labor unions.
Customers
The Corporation primarily markets its products to approximately 8,000
customers in the United States. The Corporation also markets its products to
customers in Canada, Mexico, Central and South America, Europe, Africa,
Australia and Asian countries. For the 2000 fiscal year, no single customer
represented more than 10% of the Corporation's net sales, and the Corporation's
10 largest customers accounted for approximately 26% of net sales.
Backlog
The Corporation's business generally is characterized by very short
forward order positions. The backlog of orders at any time is not material,
since most orders are deliverable within a few months. The backlog of forward
orders, after eliminating sales within the Corporation, was approximately 15.2%
of annual net sales at the end of the 2000 fiscal year, compared with
approximately 14.4% of annual net sales at the end of the 1999 fiscal year,
virtually all of which was expected to be shipped within less than a year.
Backlog at the end of the 2000 fiscal year for the PerformanceWear segment was
22.0% of annual net sales of the segment, for the CasualWear segment was 22.9%
of annual net sales of the segment, and for the Interior Furnishings segment was
8.6% of annual net sales of the segment.
Governmental Regulation
The Corporation is subject to various Federal, state and local laws and
regulations limiting the production, discharge, storage, handling and disposal
of a variety of substances, particularly the Federal Clean Water Act, the
Federal Clean Air Act, the Resource Conservation and Recovery Act, the Federal
Comprehensive Environmental Response, Compensation and Liability Act as amended
by the Superfund Amendment and Reauthorization Act of 1986, and other Federal,
state and local laws and regulations for the protection of public health and the
environment. Mexico imposes similar obligations on resident producers. The
Corporation is presently engaged in a number of environmental remediation plans
and has reported dispositions of waste that could result in future remediation
obligations. The Corporation cannot with certainty assess at this time the
impact of future emission standards and enforcement practices under the 1990
Clean Air Act upon its operations or capital expenditure requirements. Reference
is also made to the discussion of "Legal and Environmental Contingencies" under
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" in the Corporation's 2000 Annual Report to Shareholders, which is
incorporated herein by reference.
The Corporation's operations also are governed by laws and regulations
relating to workplace safety and worker health, principally the Occupational
Safety and Health Act and regulations thereunder which, among other things,
establish cotton dust, formaldehyde, asbestos and noise standards, and regulate
the use of hazardous chemicals in the workplace. The Corporation uses numerous
chemicals, including resins containing formaldehyde, in processing some of its
products. Although the Corporation does not use asbestos in the manufacture of
its products, some of its facilities contain some structural asbestos.
The Corporation believes that it has complied in all material respects
with the foregoing environmental or health and safety laws or regulations and
does not believe that future compliance with such laws or regulations will have
a material adverse effect on its results of operations or financial condition.
Item 2. Properties
As of September 30, 2000 the Corporation operated 21 manufacturing plants
in the United States, of which 11 were located in North Carolina, six in
Virginia, two in Arkansas and one each in Mississippi and Tennessee. All but two
of these plants are owned in fee. The aggregate floor area of these
manufacturing plants in the United States is approximately 9.8 million square
feet. The Corporation's international operations include five textile
manufacturing plants, two garment assembly plants, a joint venture yarn plant
and a joint venture garment processing plant, all in Mexico, and a joint venture
fabric plant in India. As a result of the 2000 Restructuring, the Corporation
will close or sell a manufacturing plant in Tennessee utilized in the
PerformanceWear division, two tufted rug plants utilized by Burlington House
Floor Accents in Monticello, Arkansas, the mens slack garment assembly facility
utilized by PerformanceWear in Mexico and its residential carpet plant in
Mexico. The Corporation is engaged in discussions to sell its Bacova business
which would transfer one plant in Virginia to a purchaser if consumated.
Three of the plants in Mexico (two wholly-owned and one joint venture)
are located on a site near the Popocatepetl volcano which has become very active
in December 2000. The Corporation believes that its insurance coverages are
adequate to protect it from damage or business interruption in the event of an
unprecedented , catastrophic eruption.
Of the Corporation's manufacturing plants (including the two garment
assembly plants), 10 are used principally in the PerformanceWear segment, five
are used in the CasualWear segment, and 13 are used in the Interior Furnishings
segment. In addition, the Corporation has eight manufacturing plants not
currently in operation and held for sale. The Corporation's U.S. plants
generally operate on a three-shift basis for five-, six- or seven-day weeks
during 49 weeks per year, or fewer weeks per year during curtailments. The
Corporation considers its plants and equipment to be in good condition.
The corporate headquarters building in Greensboro, North Carolina,
containing approximately 430,000 square feet, was completed and occupied in
1971. The building is located on property occupied under a 99-year ground lease
that began in 1969.
Under the amended and restated Bank Credit Facility entered into by the
Corporation as of December 5, 2000, liens on substantially all of the
Corporation's assets (excluding accounts receivables which are subject to a lien
under a separate credit facility) were granted to bank lenders as collateral to
secure this facility. At the closing, the Corporation mortgaged 19 real
properties to the banks, consisting of the major manufacturing facilities of the
Corporation and its headquarters building, and has committed to mortgage an
additional 9 properties as promptly as possible.
Item 3. Legal Proceedings
The Corporation and its subsidiaries have sundry claims and other lawsuits
pending against them and also have made certain guarantees in the ordinary
course of business. It is not possible to determine with certainty the ultimate
liability, if any, of the Corporation in any of the matters referred to in this
item, but in the opinion of management, their outcome should have no material
adverse effect upon the financial condition or results of operations of the
Corporation.
Item 4. Submission of Matters to a Vote of Security Holders
At the Corporation's 2000 Annual Meeting of Stockholders on February 3,
2000, the stockholders voted to elect Jerald A. Blumberg, John D. Englar and
Abraham B. Stenberg as Directors for a three-year term; and to select Ernst &
Young LLP as independent public accountants for the 2000 fiscal year. (Mr.
Stenberg resigned as a director in connection with his retirement as an officer
of the Corporation at the fiscal year end.) The votes received for each such
matter were as follows:
Matter For Against or Abstain Broker Non-Votes
Withheld
Jerald A. Blumberg 45,894,600 979,093 0 N/A
John D. Englar 45,868,669 1,005,024 0 N/A
Abraham B. Stenberg 45,890,923 982,770 0 N/A
Ernst & Young LLP 46,609,637 185,407 78,649 N/A
Executive Officers of the Corporation
The Corporation's executive officers are listed below.
Name Age Position
George W. Henderson, III 52 Director, Chairman of the Board and
Chief Executive Officer
Douglas J. McGregor 59 Director, President and Chief
Operating Officer
John D. Englar 53 Director, Senior Vice President,
Corporate Development and Law
Charles E. Peters, Jr. 48 Senior Vice President and Chief
Financial Officer
John P. Ganley 46 President, Burlington House Division
Bernard J. Leonard 61 President, Burlington CasualWear Division
James R. McCallum 45 President, Lees Carpet Division
Judith J. Altman 42 Vice President and Chief
Information Officer
James M. Guin 57 Vice President, Human Resources
and Corporate Communications
Robert A. Wicker 56 Vice President and General Counsel
Carl J. Hawk 59 Controller
Randall A. Hanson 40 Corporate Secretary and
Associate General Counsel
Mr. Henderson has been Chairman of the Board of the Corporation since
February 1998, and Chief Executive Officer since 1995. Prior thereto, he was
President and Chief Operating Officer of the Corporation (from 1993).
Mr. McGregor joined the Corporation as President and Chief Operating
Officer on June 1, 2000, and was elected a Director on July 26, 2000. Prior to
joining the Corporation, Mr. McGregor served as Chairman and Chief Executive
Officer (from January 1997 to October 1998) and President and Chief Operating
Officer (from January 1990 to January 1997) of M. A. Hanna Company.
Mr. Englar has been Senior Vice President, Corporate Development and Law
of the Corporation since 1995. Prior thereto, he was Senior Vice President,
Finance and Law (from 1993) and Chief Financial Officer of the Corporation (from
1994).
Mr. Peters has been Senior Vice President and Chief Financial Officer of
the Corporation since 1995. He was Senior Vice President-Finance of Boston
Edison Company from 1991 until joining Burlington.
Mr. Ganley has been President of the Burlington House Division since 1997.
Prior thereto, he was President of the Burlington House Floor Accents Division
(1996 - 1997) and President of the Lees Carpets Division of the Corporation
(1994 - 1997).
Mr. Leonard has been President of the Burlington CasualWear Division and
its predecessor, the Burlington Global Denim Division, since 1989.
Mr. McCallum was named President of the Lees Carpets Division of the
Corporation in June 1999. Prior thereto, he was Executive Vice President, Sales
and Marketing (1997 - 1999), and Vice President, Operations (1994 - 1997), of
the Lees Carpets Division.
Ms. Altman has been Vice President and Chief Information Officer of the
Corporation since September 1998. Prior thereto, she was Senior Director of
Information Systems with Polo/Ralph Lauren (from 1995) and Vice President of New
Product Development of CMS, Inc. (from 1994 to 1995).
Mr. Guin has been Vice President, Human Resources and Corporate
Communications of the Corporation, since 1996. Prior thereto, he was Director of
Human Resources for the Corporation (from 1993 through 1995).
Mr. Wicker has been Vice President and General Counsel of the Corporation
since 1995. Prior thereto, he was Associate General Counsel of the Corporation
(from 1992).
Mr. Hawk was elected Controller of Burlington in November 1999. Prior
thereto, he was Director of Accounting of the Corporation (from 1990).
Mr. Hanson was named Corporate Secretary and Associate General Counsel on
November 1, 2000. Prior thereto, he was Associate General Counsel and Assistant
Secretary (from 1995).
Executive officers of the Corporation are elected by, and serve at the
discretion of, its Board of Directors. None of the executive officers or
Directors of the Corporation is related by blood, marriage or adoption to any
other executive officer or Director of the Corporation.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
Reference is made to Note S to the Notes to Consolidated Financial
Statements in the Corporation's 2000 Annual Report to Shareholders, which is
incorporated herein by reference, for information concerning the composite high
and low sales prices for the Corporation's Common Stock for each fiscal quarter
of fiscal years 2000 and 1999. The Corporation's common stock is traded on the
New York Stock Exchange.
As of November 17, 2000, there were approximately 1,763 holders of record
of the Corporation's Common Stock and one holder of record of the Corporation's
Nonvoting Common Stock.
The Corporation has not paid any cash dividends on its common stock during
fiscal years 2000 and 1999. Under the provisions of the Corporation's amended
and restated Bank Credit Agreement the Corporation may not pay cash dividends or
repurchase stock (other than limited amounts under employee stock or incentive
plans).
Item 6. Selected Financial Data
The information required by this Item is set forth in the table entitled
"Statistical Review" in the Corporation's 2000 Annual Report to Shareholders and
is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required by this Item is set forth under the caption
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" in the Corporation's 2000 Annual Report to Shareholders and is
incorporated herein by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The information required by this Item is set forth under the subheading
"Risk Management" on page 15 in the Corporation's 2000 Annual Report to
Shareholders and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The financial statements, including the Report of the Corporation's
Independent Auditors, required by this Item are incorporated herein by reference
to the Corporation's 2000 Annual Report to Shareholders. See Item 14 for a list
of those financial statements and the pages of the Corporation's 2000 Annual
Report to Shareholders from which they are incorporated.
INDEX TO FINANCIAL STATEMENT SCHEDULE
Page No.
Burlington Industries, Inc. and Subsidiary Companies:
II. Valuation and Qualifying Accounts. S-1
All other schedules have been omitted because they are not applicable, not
required or because the required information is included in the consolidated
financial statements or notes thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required by this Item is set forth under the captions
"Information about Nominees and Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" in the Corporation's Proxy Statement dated
December 22, 2000 and is incorporated herein by reference.
Information with respect to the Corporation's executive officers is
included in Part I of this Report.
Item 11. Executive Compensation
The information required by this Item is set forth under the captions
"Compensation of Directors"; "Report of the Compensation and Benefits Committee
on Executive Compensation"; "Executive Compensation"; and "Stock Performance
Graph" in the Corporation's Proxy Statement dated December 28, 2000 and is
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by this Item is set forth under the caption
"Security Ownership of Certain Beneficial Owners and Management" in the
Corporation's Proxy Statement dated December 22, 2000 and is incorporated herein
by reference.
Item 13. Certain Relationships and Related Transactions
None.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) 1. Financial Statements
The information contained in the Corporation's 2000 Annual Report
to Shareholders under the captions and on the pages indicated
below is incorporated herein by reference:
Report of Ernst & Young LLP, Independent Auditors (page 37)
Consolidated Statements of Operations - for the fiscal
years ended September 30, 2000, October 2, 1999 and October
3, 1998 (page 17)
Consolidated Balance Sheets - as of September 30, 2000 and
October 2, 1999 (page 18)
Consolidated Statements of Shareholders' Equity - for the
fiscal years ended October 3, 1998, October 2, 1999 and
September 30, 2000 (page 19)
Consolidated Statements of Cash Flows - for the fiscal
years ended September 30, 2000, October 2, 1999, and
October 3, 1998 (page 20)
Notes to Consolidated Financial Statements (pages 21 to 35)
2. Financial Statement Schedules
The financial statement schedule listed under Item 8 is filed as a
part of this Report.
3. Exhibits
The exhibits listed on the accompanying Index to Exhibits are
filed as a part of this Report.
(b) The Corporation did not file any reports on Form 8-K for the last
quarter of fiscal year 2000.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Corporation has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
BURLINGTON INDUSTRIES, INC.
Date: December 15, 2000
By /s/ George W. Henderson, III
---------------------------------
George W. Henderson, III
Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Corporation and in the capacities and on the dates indicated.
Signature Title Date
/s/ George W. Henderson, III Director, Chairman of the December 15, 2000
---------------------------- Board and Chief Executive
George W. Henderson, III Officer
(Principal Executive Officer)
/s/ Charles E. Peters, Jr. Senior Vice President and December 15, 2000
---------------------------- Chief Financial Officer
Charles E. Peters, Jr. (Principal Financial Officer)
/s/ Carl J. Hawk Controller December 15, 2000
---------------------------- (Principal Accounting Officer)
Carl J. Hawk
/s/ Jerald A. Blumberg Director December 15, 2000
----------------------------
Jerald A. Blumberg
/s/ John D. Englar Director December 15, 2000
----------------------------
John D. Englar
/s/ Douglas J. McGregor Director December 15, 2000
----------------------------
Douglas J. McGregor
/s/ John G. Medlin, Jr. Director December 15, 2000
----------------------------
John G. Medlin, Jr.
/s/ Nelson Schwab III Director December 15, 2000
----------------------------
Nelson Schwab III
/s/ Theresa M. Stone Director December 15, 2000
----------------------------
Theresa M. Stone
/s/ W. Barger Tygart Director December 15, 2000
----------------------------
W. Barger Tygart
<PAGE>
Index to Exhibits
(Item 14(a)(3))
Exhibit
No. Description
3.1 Restated Certificate of Incorporation of Burlington
Industries, Inc. ("the Company") (incorporated by reference
from the Company's Registration Statement on Form 8-B, filed
on June 3, 1994).
3.2 Bylaws of the Company (incorporated by reference from the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 29, 1997).
4.1 Credit Agreement dated as of September 30, 1988, as amended
and restated as of December 5, 2000, among the Company, the
Lenders listed therein, The Chase Manhattan Bank, as
Administrative Agent, and Chase Manhattan Bank USA, N.A., as
Fronting Bank, together with forms of Indemnity, Subrogation
and Contribution Agreement, Guarantee Agreement, Pledge
Agreement and Security Agreement, each Exhibits to the Credit
Agreement.
4.2 Form of Rights Agreement dated as of December 3, 1997 (amended
and restated as of February 4, 1999), between the Company and
First Union National Bank (as successor to Wachovia Bank,
N.A.), as Rights Agent (incorporated by reference from Exhibit
4.1 to the Company's Registration Statement on Form 8-A/A
filed on April 5, 1999).
4.3 Indenture dated as of September 1, 1995 between the Company
and The Bank of New York (as Successor Trustee to Wachovia
Bank of North Carolina, N.A.), and forms of notes thereto as
Exhibits to the Indenture (incorporated by reference from the
Company's Registration Statement on Form S-3, File No.
33-95350, filed on August 2, 1995).
10.1 Indenture of Lease dated February 26, 1969, between Blanche S.
Benjamin and Edward B. Benjamin, and a predecessor to the
Company, including the amendment thereto (incorporated by
reference from Burlington Holdings Inc.'s ("Burlington
Holdings") Registration Statement on Form S-1, File No.
33-16437, filed on August 12, 1987).
10.2 Form of Stock Purchase Agreement dated as of March 19, 1992,
between Burlington Equity and The Equitable Life Assurance
Society of the United States and its affiliates (incorporated
by reference from Amendment No. 6 to Burlington Equity's
Registration Statement on Form S-1, File No. 33-45149, filed
on March 19, 1992).
10.3(a) Stockholder Agreement dated as of October 23, 1990, among
Burlington Equity and the other parties listed on the
signature pages thereof (incorporated by reference from the
Annual Report on Form 10-K for Burlington Industries Capital
Inc. for the fiscal year ended September 29, 1990).
10.3(b) Amendment dated January 17, 1992, to the Stockholder Agreement
(incorporated by reference from Amendment No. 3 to Burlington
Equity's Registration Statement on Form S-1, File No.
33-45149, filed on March 5, 1992).
10.3(c) Letter agreement dated October 25, 1993, with respect to the
Stockholder Agreement (incorporated by reference form the
Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1995).
10.4 1994 Deferred Compensation Plan (incorporated by reference
from the Annual Report on Form 10-K for Burlington Industries
Equity Inc. ("Burlington Equity") for the fiscal year ended
October 2, 1993). (Management contract or compensatory plan,
contract or arrangement.)
10.5 Description of Supplemental Executive Retirement Plan, and
form of participant agreement (incorporated by reference from
the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended January 1, 2000). (Management contract or
compensatory plan, contract or arrangement.)
10.6 Benefits Equalization Plan, as amended and restated on July
28, 1994 (incorporated by reference from the Company's Annual
Report on Form 10-K for the fiscal year ended October 1,
1994). (Management contract or compensatory plan, contract or
arrangement.)
10.7 Burlington Equity Amended and Restated Equity Incentive Plan
(the "1990 Plan") (incorporated by reference from the
Quarterly Report on Form 10-Q for the Company for the fiscal
quarter ended July 1, 2000). (Management contract or
compensatory plan, contract or arrangement.)
10.8(a) Burlington Equity Amended and Restated 1992 Equity Incentive
Plan (the "1992 Plan" (incorporated by reference from the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended July 1, 2000). (Management contract or compensation
plan, contract or arrangement.)
10.8(b) Forms of agreements under 1992 Plan (incorporated by reference
from the Annual Report on Form 10-K for Burlington Equity for
the fiscal year ended October 3, 1992). (Management contract
or compensatory plan, contract or arrangement.)
10.8(c) Forms of amendments to agreements under 1992 Plan, effective
as of July 28, 1993 (incorporated by reference from the Annual
Report on Form 10-K for Burlington Equity for the fiscal year
ended October 2, 1993). (Management contract or compensatory
plan, contract or arrangement.)
10.9(a) Amended and Restated 1995 Equity Incentive Plan ("1995 Plan")
(incorporated by reference from the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended July 1, 2000).
(Management contract or compensatory plan, contract or
arrangement.)
10.9(b) Form of agreement under 1995 Plan (incorporated by reference
from the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended March 30, 1996). (Management contract or
compensatory plan, contract or arrangement.)
10.9(c) Form of agreement under 1995 Plan (incorporated by reference
from the Company's Annual Report on Form 10-K for the fiscal
year ended October 2, 1999). (Management contract or
compensatory plan, contract or arrangement.)
10.10(a) Amended and Restated 1998 Equity Incentive Plan ("1998 Plan")
(incorporated by reference from the Company's Quarterly Report
on Form 10-Q for the fiscal quarter ended July 1, 2000).
(Management contract or compensatory plan, contract or
arrangement).
10.10(b) Forms of agreements under 1998 Plan (incorporated by reference
from the Company's Annual Report on Form 10-K for the fiscal
year ended October 2, 1999). (Management contract or
compensatory plan, contract or arrangement).
10.10(c) Form of agreement under the 1995 and 1998 Plans. (Management
contract or compensatory plan, contract or arrangement).
10.11 Form of restricted stock agreements under the 1990, 1992, 1995
and 1998 Plans (incorporated by reference from the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
July 1, 2000). (Management contract or compensatory plan,
contract or arrangement).
10.12 Agreement dated as of February 3, 2000 between the Company and
George W. Henderson, III (incorporated by reference from the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended April 1, 2000). (Management contract or compensatory
plan, contract or arrangement.)
10.13(a) Agreement dated as of January 1, 1998, between the Company and
Abraham B. Stenberg (incorporated by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended
October 3, 1998). (Management contract or compensatory plan,
contract or arrangement).
10.13(b) Agreement dated September 13, 2000 between the Company and
Abraham B. Stenberg. (Management contract or compensatory
plan, contract or arrangement).
10.14 Agreement dated May 19, 2000 between the Company and Douglas
J. McGregor. (Management contract or compensatory plan,
contract or arrangement).
10.15 Agreement dated as of February 3, 2000, between the Company
and John D. Englar (incorporated by reference from the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended April 1, 2000). (Management contract or compensatory
plan, contract or arrangement).
10.16 Agreement dated as of February 3, 2000, between the Company
and Charles E. Peters, Jr. (incorporated by reference from the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended April 1, 2000). (Management contract or compensatory
plan, contract or arrangement).
10.17 Agreement dated as of January 1, 2000, between the Company and
James R. McCallum. (Management contract or compensatory plan,
contract or arrangement).
10.18 AvantGarb, LLC 2000 Equity Incentive Plan and forms of
agreement thereunder (incorporated by reference from the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended July 1, 2000). (Management contract or compensatory
plan, contract or arrangement.)
10.19 Director Stock Plan (incorporated by reference from the
Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended July 3, 1999). (Management contract or compensatory
plan, contract or arrangement).
10.20(a) Amended and Restated Receivables Purchase Agreement dated as
of December 10, 1997 among B.I. Funding, Inc. ("BIF"), the
Company, B.I. Transportation, Inc. ("BIT"), Burlington Apparel
Services Company ("BASC"), Burlington International Services
Company ("BISC"), Burlington Fabrics Inc. ("Fabrics") and The
Bacova Guild, Ltd. ("Bacova") (incorporated by reference from
the Company's Annual Report on Form 10-K for the fiscal year
ended September 27, 1997).
10.20(b) Amended and Restated Facility Agreement dated as of December
10, 1997, among BIF, the Company, as Servicer, and Wachovia,
as Agent and Collateral Agent (incorporated by reference from
the Company's Annual Report on Form 10-K for the fiscal year
ended September 27, 1997).
10.20(c) Loan Agreement dated as of December 10, 1997, among BIF,
certain financial institutions as Liquidity Lenders, Blue
Ridge Asset Funding Corporation, as Conduit Lender, and
Wachovia, as Agent for the Lenders (incorporated by reference
from the Company's Annual Report on Form 10-K for the fiscal
year ended September 27, 1997).
10.20(d) Security Agreement dated as of December 10, 1997, among BIF
and Wachovia as Agent and Collateral Agent (incorporated by
reference from the Company's Annual Report on Form 10-K for
the fiscal year ended September 27, 1997).
10.20(e) Amended and Restated Subordination Agreement, Consent and
Acknowledgment, dated as of December 10, 1997, among BIF, the
Company, BIT, BASC, BISC, Fabrics, Bacova and Wachovia, as
Agent and Collateral Agent (incorporated by reference from the
Company's Form 10-K Annual Report for the fiscal year ended
September 27, 1997).
12 Computation of Ratio of Earnings to Fixed Charges.
13 Portions of the Company's 2000 Annual Report to Shareholders
expressly incorporated by reference.
18 Letter of Ernst & Young LLP regarding change in accounting
principles.
21 List of subsidiaries of the Company.
23 Consent of Ernst & Young LLP.
27 Financial Data Schedule.
<PAGE>
Schedule II
BURLINGTON INDUSTRIES INC. AND SUBSIDIARY COMPANIES
Valuation and Qualifying Accounts
(Amounts in Thousands)
Additions
Charged
(Credited)
Balance at to Costs Charged Balance
Beginning and to Other at Close
Description of Period Expenses Accounts Deductions of Period
---------------------- ---------- --------- -------- ---------- ---------
Fiscal year ended September 30, 2000
------------------------------------
Deducted from customer
accounts receivable:
Doubtful accounts.... $ 3,771 $ 4,380 $ - $ 5,214 (2) $ 2,929
8 (3)
Discounts............ 883 57 (1) - - 940
Returns and
allowances.......... 13,604 (607)(1) - - 12,997
------- ------- --- ------- --------
$18,258 $ 3,830 $ - $ 5,222 $16,866
======= ======= === ======= =======
Fiscal year ended October 2, 1999
---------------------------------
Deducted from customer
accounts receivable:
Doubtful accounts.... $ 3,629 $ 5,482 $ - $ 5,353 (2) $ 3,771
(13)(3)
Discounts............ 788 95 (1) - - 883
Returns and
allowances.......... 16,447 (2,843)(1) - - 13,604
------- ------- --- ------- -------
$20,864 $ 2,734 $ - $ 5,340 $18,258
======= ======= === ======= =======
Fiscal year ended October 3, 1998
---------------------------------
Deducted from customer
accounts receivable:
Doubtful accounts.... $ 5,439 $ 1,677 $ - $ 3,377 (2) $ 3,629
110 (3)
Discounts............ 921 (133) (1) - - 788
Returns and
allowances.......... 14,328 2,119 (1) - - 16,447
------- ------- ---- ------- -------
$20,688 $ 3,663 $ - $ 3,487 $20,864
======= ======= ==== ======= =======
(1) Represents net increase (decrease) in required reserves.
(2) Uncollectible accounts receivable written off, net of recoveries.
(3) Represents changes in reserves due to foreign exchange fluctuation.
S-1
