FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to ________________________
Commission file number 0-21340
MARTIN COLOR-FI, INC.
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(Exact name of registrant as specified in its charter)
South Carolina 57-0879569
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
306 Main Street, Edgefield, South Carolina 29824
(Address of principal executive offices)
(803) 637-7000
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(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 November 10, 1998, there were 6,730,284 shares of the
registrant's common stock issued and outstanding.
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MARTIN COLOR-FI, INC.
INDEX
Page No.
Part I - Financial Information
Item 1 - Financial Statements ................................. 3
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations .................. 3
Part II - Other Information
Item 1 - Legal Proceedings ................................... 4
Item 3 - Defaults Upon Senior Securities ..................... 4
Item 6 - Exhibits and Reports on Form 8-K .................... 4
Signatures.............................................................. 5
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PART I - Financial Information
Item 1. Financial Statements:
No financial statements are presented herewith in reliance upon Rule
12b-21. The Company filed a petition for relief under Chapter 11 of the
Bankruptcy Code on November 16, 1998 in the United States Bankruptcy Court for
the District of South Carolina. On the same date, two of the Company's
consolidated subsidiaries filed petitions for relief under Chapter 11 of the
Bankruptcy Code. The impact of these filings compiled with previously announced
decisions of the Company to close certain manufacturing facilities and to
dispose of the carpet subsidiary requires very substantail adjustments to the
value of the Company's assets. To the date of this report the Company has been
unable to prepare such financial statements because it does not presently have
all of the information required to present its financial statements in
accordance with generally accepted accounting principles and could not obtain
such information without unreasonable expense.
The registrant is working diligently to obtain all of the required
information and plans to file financial statements by way of amendment to this
report as soon as the financial statements are completed. The registrant
believes that any partial financial statements would be materially misleading.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations:
The Company has filed for reorganization under Chapter 11 of the Bankruptcy
Code. See Part II Item 1. The Company is in default with respect to its senior
debt. See Part II Item 3. The Company presently does not have all of the
information required to describe its financial condition accurately, in
accordance with generally accepted accounting principles. Accordingly, no
meaningful discussion and analysis of financial condition or results of
operations can be presented at this time. This Item will be completed by
amendment when the financial statements are available.
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Part II - Other Information
Item 1. Legal Proceedings:
On November 16, 1998, the Company filed a petition for relief under Chapter
11 of the Bankruptcy Code in the United States Bankruptcy Court for the District
of South Carolina. Two consolidated subsidiaries, Buchanan Industries, Inc., and
Star Fibers, Inc. also filed petitions under Chapter 11 on November 16, 1998 in
the same court.
The Company is a defendant in three actions to foreclose security interests
and for collection of notes brought by NationsBank, N.A., as plaintiff. The
actions were instituted in the Court of Common Pleas of Sumter County, South
Carolina on November 10, 1998, the Court of Common Pleas of Edgefield County on
November 10, 1998 and the Court of Common Pleas of Laurens County, South
Carolina on November 11, 1998. These actions have been stayed by the bankruptcy
filings referred to above.
Item 3. Defaults Upon Senior Securities:
The Company is in default with respect to indebtedness which was described
in the Company's Form 10-Q for the quarter ended June 28, 1998. Total arrearage
on November 16, 1998 was estimated at $57,700,000 including accrued interest.
On November 10, 1998 NationsBank commenced legal actions to foreclose its
security interests. See Part II, Item 1 above.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits: None
(b) Reports on Form 8-K - A report on Form 8-K was filed on November 17,
1998 for the purpose of disclosing the Company's bankruptcy filing.
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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.
MARTIN COLOR-FI, INC.
By: /s/ James F. Martin
James F. Martin*
Chief Executive Officer
Dated: 11/17/98 By: /s/ Wiley H. Turner
Wiley H. Turner*
Vice President-Finance
* Principal Financial and Accounting Officer
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