<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 4, 1997
Commission File No. 1-11126
DYERSBURG CORPORATION
(Exact name of registrant as specified in its charter)
TENNESSEE 62-1363247
(State or other jurisdiction of (I.R.S employer identification no.)
incorporation or organization)
1315 PHILLIPS ST., DYERSBURG, TENNESSEE 38024
(Address of principal executive offices) (Zip Code)
(901) 285-2323
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, Par Value $.01/Share New York Stock Exchange
(Title of each class) (Name of exchange on which registered)
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 the number of shares outstanding of each issuer's classes of common
stock, as of the latest practicable date.
Title of each Number of shares outstanding as of February 11, 1997
- --------------------------- ----------------------------------------------------
Common Stock $.01 par value 13,132,480
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INDEX TO FORM 10-Q
DYERSBURG CORPORATION
<TABLE>
<CAPTION>
PART I--FINANCIAL INFORMATION PAGE NUMBER
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<S> <C>
ITEM 1--FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Condensed Balance Sheets at
January 4, 1997, September 28, 1996, and
December 30, 1995.............................................. 3
Consolidated Condensed Statements of Income
for the Three Months Ended January 4, 1997
and December 30, 1995.......................................... 4
Consolidated Condensed Statements of Cash
Flows for the Three Months Ended
January 4, 1997, and December 30, 1995......................... 5
Notes to Consolidated Condensed Financial
Statements..................................................... 6
ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS..................................................... 7
PART II--OTHER INFORMATION
ITEM 4--SUBMISSION OF MATTERS TO A VOTE OF
SHAREHOLDERS................................................... 8
ITEM 6--EXHIBITS AND REPORTS ON FORM 8-K.................................. 8
SIGNATURES................................................................ 9
</TABLE>
2
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DYERSBURG CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
January 4, September 28, December 30,
1997 1996 1995
---------- ------------- ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash $ 464 $ 983 $ 622
Accounts receivable, net 24,817 42,427 21,243
Inventories 32,215 23,248 29,116
Prepaid expenses and other 865 858 1,574
-------- -------- --------
Total current assets 58,361 67.516 52,555
Intangibles 59,117 59,733 61,272
Property, plant and equipment, net 67,612 67,758 67,920
-------- -------- --------
Total assets $185,090 $195,007 $181,747
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 7,726 $ 8,296 $ 7,953
Accrued expenses 5,776 7,137 4,732
-------- -------- --------
Total current liabilities 13,502 15,433 12,685
Deferred income taxes and other 9,327 9,239 8,860
Long-term debt 73,103 81,593 76,697
-------- -------- --------
Total liabilities 95,932 106,265 98.942
-------- -------- --------
Stockholders' Equity:
Common stock 132 132 137
Additional paid-in capital 41,323 41,460 44,336
Retained earnings 47,703 47,150 39,032
-------- -------- --------
Total stockholders' equity 89,158 88,742 83,505
-------- -------- --------
Total liabilities and stockholder's equity $185,090 $195,007 $181,747
======== ======== ========
</TABLE>
See notes to consolidated condensed financial statements.
3
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DYERSBURG CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
(Dollars in thousands except per share date)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------
January 4, December 30,
1997 1995
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<S> <C> <C>
Net Sales $ 38,793 $ 30,088
Costs and expenses:
Cost of sales 30,350 24,338
Selling, general and administrative 5,810 4,547
Interest and amortization of
debt costs 1,482 1,420
----------- ------------
Total costs and expenses 37,642 30,305
----------- ------------
Income (loss) before income taxes 1,151 (217)
Income taxes 467 (93)
----------- ------------
Net income (loss) $ 684 $ (124)
=========== ============
Earnings (loss) per primary and fully
diluted common share and
common equivalent share $ 0.05 $ (0.01)
=========== ============
Dividends per share $ 0.01 $ 0.01
=========== ============
Weighted average shares outstanding 13,432,671 13,921,052
</TABLE>
See notes to consolidated condensed financial statements.
4
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DYERSBURG CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------------
January 4, December 30,
1997 1995
----------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss) $ 684 $ (124)
Adjustments to reconcile to net cash
provided by operating activities
Depreciation and amortization 2,811 2,986
Deferred income taxes 88 84
Other-net 6,700 5,045
----------- ------------
Net cash provided by operating activities 10,283 7,991
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (2,138) (4,604)
Other-net 95 (150)
----------- ------------
Net cash used in investing activities (2,043) (4,754)
CASH FLOWS FROM FINANCING ACTIVITIES
Acquisition of common stock for treasury (160) (2,490)
Issuance of common stock 22 0
Retirement of debt (58) (60)
Net repayment of revolving credit agreement (8,432) (900)
Dividends paid (131) (139)
----------- ------------
Net cash used in financing activities (8,759) (3,589)
----------- ------------
Net increase (decrease) in cash (519) (352)
Cash at beginning of period 983 974
----------- ------------
Cash at end of period $ 464 $ 622
=========== ============
</TABLE>
See notes to consolidated condensed financial statements.
5
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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
DYERSBURG CORPORATION
January 4, 1997
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed financial statements
include the accounts of Dyersburg Corporation ("Company") and its wholly-owned
subsidiaries. All significant intercompany balances and transactions have been
eliminated. The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. Financial information as of
September 28, 1996 has been derived from the audited financial statements of the
Corporation, but does not include all disclosures required by generally accepted
accounting principles. In the opinion of management, all adjustments, consisting
only of normal recurring adjustments, necessary for a fair presentation of the
financial information for the periods indicated have been included. The results
for interim periods are not necessarily indicative of results to be expected for
the year. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the fiscal year ended September 28, 1996. The quarter ended January 4,
1997, included 14 weeks, while the quarter ended December 30, 1995, included 13
weeks.
NOTE B--INVENTORIES
<TABLE>
<CAPTION>
Jan. 4, Sept. 28, Dec. 30,
1997 1996 1995
-------- --------- --------
(in thousands)
<S> <C> <C> <C>
Raw Materials $ 6,801 $ 5,573 $ 4,644
Work in Process 13,077 8,530 11,532
Finished Goods 12,337 9,145 12,940
------- ------- -------
$32,215 $23,248 $29,116
======= ======= =======
</TABLE>
NOTE C--STOCK REPURCHASE
On October 4, 1995, the Company approved a plan to repurchase up to
2,000,000 shares of Dyersburg Corporation common stock. The repurchase is
expected to occur over a period of approximately 18 months and will be made
at the discretion of the Company as warranted based upon market pricing. As of
January 4, 1997, a total of 1,078,275 shares had been purchased under the
repurchase plan at an aggregate cost of $5,573,554 or $5.17 per share, on
average.
6
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ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
The net income for the first fiscal quarter of 1997 was $684,000, or $0.05
per share, versus a net loss of ($124,000), or ($.01) per share in the first
fiscal quarter of the prior year. The weighted average number of shares
outstanding in the quarter ended January 4, 1997, decreased to 13,135,133 from
13,921,052 in the first quarter of the prior year as a result of the Company's
stock repurchase program.
Net sales for the quarter ended January 4, 1997 increased by 29% to $38.8
million versus $30.1 million for the quarter ended December 30, 1995. The
increase in net sales dollars was driven by an approximate 200% increase in
outerwear shipments for the first quarter of 1997 as compared to the same period
in 1996. Stretch fabrics enjoyed an increase of over 20%, while cotton jersey
fabrics reflected strong sales volumes as well. Gross margins for the quarter
improved to 21.8% for the first quarter of 1997 versus 19.1% for the same period
in fiscal 1996. Margins benefited from an improved product mix combined with the
overall increase in sales.
Selling, general and administrative expenses increased 27.8% for the first
quarter of fiscal 1997 compared to the same period in fiscal 1996. However ,
these same expenses as a percentage of sales were 14.9% for the first quarter, a
decrease from 15.1% for the same period in 1996.
Quarterly interest expense of $1,482,000 was approximately equal to that of
the prior year. When compared to the higher sales volume for the period ended
January 4, 1997; however, interest as a percentage of sales decreased to 3.8% in
the fiscal 1997 quarter versus 4.7% in the comparable period in fiscal 1996. The
effective tax rate for the first quarter of fiscal 1997 was approximately 41%,
exceeding the federal statutory rate due to the nondeductibility for tax
purposes of certain expense items, principally the amortization of goodwill.
Liquidity and Capital Resources
Working capital at January 4, 1997, decreased to $44.9 million versus $52.1
at September 28, 1996, due primarily to a decline in accounts receivable
reflecting the lower sales volume typically experienced in the first fiscal
quarter as compared to the fourth fiscal quarter. The decrease was partially
offset by a seasonal increase in inventories. The Company's current ratio was
4.32:1 and its debt-to-capital ratio was 45.1% at January 4, 1997, compared to
4.37:1 and 47.9%, respectively at September 28, 1996.
Net receivables decreased from $42.4 million at September 28, 1996, to
$24.8 million at January 4, 1997, as a result of seasonal sales levels.
Inventories increased to $32.2 million during the first quarter of 1997 in
anticipation of seasonally stronger sales for the remainder of the fiscal year.
7
<PAGE> 8
Capital expenditures for the three months ended January 4, 1997, were $2.1
million versus $4.6 million for the same period in the prior year. The Company
anticipates that capital expenditures in fiscal 1997 will approximate the same
level experienced in 1996 of $11.8 million.
The Company's stock repurchase program was funded by cash flows from
operations with purchases made at the Company's discretion when market pricing
was deemed advantageous. A total of 27,000 shares were purchased during the
quarter at an aggregate cost of $160,000 or $5.92 per share on average.
At January 4, 1997, the Company had $32.3 million of unused available bank
lines of credit. The Company believes that cash generated from operations and
the available revolving credit facility will be sufficient to fund the capital
spending, stock repurchase program and meet normal operating needs.
PART II--OTHER INFORMATION
ITEM 4--SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of shareholders during the three
months ended January 4, 1997.
ITEM 6--EXHIBITS AND REPORTS ON FORM 8-K
(a) 11 Statements regarding computation of
earnings per share.
27 Financial Data Schedule (for SEC use only)
(b) The Corporation did not file any reports
on Form 8-K during the three months ended
January 4, 1997.
8
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
February 12, 1997 (s) William S. Shropshire, Jr.
---------------------------------------
William S. Shropshire, Jr.
Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
9
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Exhibit 11-Computation of Earnings Per Share
(Dollars in thousands except share and per share data)
<TABLE>
<CAPTION>
Three Months Ended
------------------------------
Jan. 4, 1997 Dec. 30, 1995
------------ -------------
<S> <C> <C>
Average shares
outstanding 13,423,671 13,921,052
Net income (loss) $ 684 $ (124)
========== ==========
Earnings (loss) per share
of common stock $ .05 $ (.01)
========== ==========
</TABLE>
The effect of common stock equivalents, consisting of stock options, calculated
using the treasury stock method, was not dilutive during either three-month
period. For the three months ended December 30, 1995 the market price was
below the exercise price for all stock options. Accordingly, the effect of any
such options are not reflected during that period. For the three months ended
January 4, 1997, 288,538 common stock equivalent shares are included in the
total for weighted average shares outstanding.
10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE PERIOD ENDED JANUARY 4, 1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-04-1997
<PERIOD-END> JAN-04-1997
<CASH> 1
<SECURITIES> 0
<RECEIVABLES> 26
<ALLOWANCES> (1)
<INVENTORY> 32
<CURRENT-ASSETS> 58
<PP&E> 115
<DEPRECIATION> 47
<TOTAL-ASSETS> 185
<CURRENT-LIABILITIES> 14
<BONDS> 73
0
0
<COMMON> 41
<OTHER-SE> 48
<TOTAL-LIABILITY-AND-EQUITY> 185
<SALES> 39
<TOTAL-REVENUES> 39
<CGS> 30
<TOTAL-COSTS> 6
<OTHER-EXPENSES> 1
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1
<INCOME-PRETAX> 1
<INCOME-TAX> 0
<INCOME-CONTINUING> 1
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
