<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 PERIOD ENDED FEBRUARY 26, 1999
-----------------
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 33-68412
---------------
AVONDALE INCORPORATED
(Exact name of registrant as specified in its charter)
GEORGIA 58-0477150
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
506 SOUTH BROAD STREET 30655
MONROE, GEORGIA (Zip code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (770) 267-2226
Former name, former address and former fiscal year, if changed since last
report: N/A
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 of the issuer's
classes of common stock, as of the latest practicable date.
Description As Of Shares Outstanding
-------------------- ------------- ------------------
Class A Common Stock April 9, 1999 11,698,184 Shares
Class B Common Stock April 9, 1999 978,939 Shares
===============================================================================
<PAGE> 2
FORM 10-Q
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION (UNAUDITED)
<TABLE>
<CAPTION>
Item 1: Financial Statements
<S> <C> <C>
Condensed Consolidated Balance Sheets at February 26, 1999 and August 28, 1998........ 1
Condensed Consolidated Statements of Income for the Thirteen Weeks Ended
February 26, 1999 and February 27, 1998............................................... 2
Condensed Consolidated Statements of Income for the Twenty-Six Weeks Ended
February 26, 1999 and February 27, 1998............................................... 3
Condensed Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended
February 26, 1999 and February 27, 1998............................................... 4
Notes to Condensed Consolidated Financial Statements.................................. 5
Item 2: Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................................ 7
Item 3: Quantitative and Qualitative Disclosures about Market Risk............................ 10
PART II - OTHER INFORMATION
Item 1: Legal Proceedings .................................................................... 11
Item 2: Changes in Securities and Use of Proceeds............................................. 11
Item 3: Defaults upon Senior Securities....................................................... 11
Item 4: Submission of Matters to a Vote of Security Holders................................... 11
Item 5: Other Information..................................................................... 11
Item 6: Exhibits and Reports on Form 8-K...................................................... 11
Signature ...................................................................................... 12
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AVONDALE INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AUG. 28, FEB. 26,
1998 1999
--------- ---------
<S> <C> <C>
ASSETS
Current assets
Cash $ 9,259 $ 5,424
Accounts receivable, less allowance for doubtful accounts
of $2,533 in fiscal 1998 and $2,642 in fiscal 1999
62,497 53,212
Inventories
114,684 138,588
Prepaid expenses
742 1,959
--------- ---------
Total current assets
187,182 199,183
Property, plant and equipment
Land
8,510 8,510
Buildings
82,366 83,372
Machinery and equipment
430,629 455,091
--------- ---------
521,505 546,973
Less accumulated depreciation (267,791) (288,062)
--------- ---------
253,714 258,911
Other assets
22,686 21,846
--------- ---------
$ 463,582 $ 479,940
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 34,839 $ 32,119
Accrued compensation, benefits and related expenses
24,665 17,740
Other accrued expenses
18,970 19,497
Long-term debt due in one year
2,250 2,250
Income taxes payable
1,345 --
--------- ---------
Total current liabilities
82,069 71,606
Long-term debt
244,575 267,500
Deferred income taxes and other long-term liabilities
36,894 38,420
Shareholders' equity
Preferred stock
$.01 par value; 10,000 shares authorized -- --
Common stock
Class A, $.01 par value; 100,000 shares
authorized, 11,698 issued and outstanding
117 117
Class B, $.01 par value; 5,000 shares
authorized, 979 issued and outstanding
10 10
Capital in excess of par value
39,835 39,835
Retained earnings
60,082 62,452
--------- ---------
Total shareholders' equity
100,044 102,414
--------- ---------
$ 463,582 $ 479,940
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
1
<PAGE> 4
AVONDALE INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED
---------------------------
FEB. 27, FEB. 26,
1998 1999
--------- ---------
<S> <C> <C>
Net sales $ 250,277 $ 206,509
Operating costs and expenses
Cost of goods sold
210,798 180,049
Depreciation
9,660 10,352
Selling and administrative expenses 11,450
9,313
--------- ---------
Operating income 18,369 6,795
Interest expense 5,701 5,795
Discount and expenses on sale of receivables 1,695 1,419
Other expense, net 191 16
--------- ---------
Income (loss) before income taxes 10,782 (435)
Provision for (benefit of) income taxes
4,315 (115)
--------- ---------
Net income (loss) $ 6,467 $ (320)
========= =========
Per share data:
Net income (loss) - basic $ .49 $ (.03)
========= =========
Net income (loss) - diluted $ .48 $ (.02)
========= =========
Dividends declared $ .10 $ .10
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE> 5
AVONDALE INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS ENDED
------------------------
FEB. 27, FEB. 26,
1998 1999
-------- --------
<S> <C> <C>
Net sales $519,066 $430,028
Operating costs and expenses
Cost of goods sold 436,091 366,084
Depreciation 19,663 20,886
Selling and administrative expenses 22,727 20,142
-------- --------
Operating income 40,585 22,916
Interest expense 11,371 11,449
Discount and expenses on sale of receivables 3,846 3,122
Other expense, net 223 279
-------- --------
Income before income taxes 25,145 8,066
Provision for income taxes 10,060 3,160
-------- --------
Net income $ 15,085 $ 4,906
======== ========
Per share data:
Net income- basic $ 1.14 $ .39
======== ========
Net income- diluted $ 1.12 $ .38
======== ========
Dividends declared $ .20 $ .20
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE> 6
AVONDALE INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS ENDED
-------------------------
FEB. 27, FEB. 26,
1998 1999
-------- --------
<S> <C> <C>
Operating activities
Net income $ 15,085 $ 4,906
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 19,858 21,076
Provision for (benefit of) deferred income taxes 2,519 (1,262)
(Gain) loss on sale of equipment (95) 5
Changes in operating assets and liabilities (25,661) 2,137
-------- --------
Net cash provided by operating activities 11,706 26,862
Investing activities
Purchases of property, plant and equipment (30,813) (26,988)
Proceeds from sale of property, plant and equipment 154 901
-------- --------
Net cash used in investing activities (30,659) (26,087)
Financing activities
Net borrowings on revolving line of credit and long term debt 15,625 22,925
Increase (decrease) in accounts receivable sold 3,000 (25,000)
Dividends paid (2,654) (2,535)
-------- --------
Net cash provided by (used in) financing activities 15,971 (4,610)
Decrease in cash (2,982) (3,835)
Cash at beginning of period 8,517 9,259
-------- --------
Cash at end of period $ 5,535 $ 5,424
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE> 7
AVONDALE INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
FEBRUARY 26, 1999
1. Basis of Presentation: The accompanying unaudited condensed
consolidated financial statements include the accounts of Avondale Incorporated
and its wholly owned subsidiaries, Avondale Mills, Inc. and Avondale Receivables
Company (collectively, the "Company"). These statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The August 28, 1998 balance sheet has been derived from
the audited financial statements at that date. The accounting policies and basis
of presentation followed by the Company are presented in Note 1 to the August
28, 1998 Audited Consolidated Financial Statements.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation. Operating results for the
twenty-six weeks ended February 26, 1999 are not necessarily indicative of the
results that may be expected for the fiscal year ending August 27, 1999.
During the first quarter of fiscal 1999, the Company adopted Statement
of Financial Accounting Standard No. 130 "Reporting Comprehensive Income" (FAS
130), which requires the reporting and display of net income plus other
comprehensive income items such as unrealized gains and losses on securities or
foreign currency translation adjustments. The adoption of FAS 130 did not have a
material impact on the presentation of the Company's condensed consolidated
financial statements, as the Company does not have any significant other
comprehensive income to report.
2. Inventories: Components of inventories are as follows (amounts in
thousands):
<TABLE>
<CAPTION>
AUG. 28, FEB. 26,
1998 1999
-------- --------
<S> <C> <C>
Finished goods $ 28,744 $ 44,412
Work in process 49,434 56,794
Raw materials 23,279 24,239
Dyes and chemicals 6,084 5,954
-------- --------
Inventories at FIFO 107,541 131,399
Less allowance to reduce carrying value to
LIFO basis -- --
-------- --------
107,541 131,399
Supplies at average cost 7,143 7,189
-------- --------
$114,684 $138,588
======== ========
</TABLE>
5
<PAGE> 8
AVONDALE INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
(UNAUDITED)
FEBRUARY 26, 1999
Valuation of the Company's inventories under the last-in, first-out
(LIFO) method at February 26, 1999 and the related impact on the statement of
income for the twenty-six weeks then ended has been determined using estimated
quantities and costs as of the fiscal 1999 year-end. As a result, interim
amounts are subject to the final year-end LIFO valuation.
3. Earnings Per Share: Earnings per share is calculated by dividing the
reported net income for the period by the appropriate weighted average number of
shares of common stock outstanding, as shown below (amounts in thousands):
<TABLE>
<CAPTION>
Thirteen Weeks Ended Twenty-Six Weeks Ended
---------------------- ----------------------
Feb. 27, Feb. 26, Feb. 27, Feb. 26,
1998 1999 1998 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Weighted average shares outstanding -
Basic 13,269 12,677 13,269 12,677
Effect of employee stock options 180 279 180 279
------ ------ ------ ------
Weighted average shares outstanding -
diluted 13,449 12,956 13,449 12,956
====== ====== ====== ======
</TABLE>
4. Contingencies: The Company is involved in certain environmental
matters and claims. The Company has provided reserves to cover management's
estimates of the cost of investigating, monitoring and remediating these and
other environmental conditions. If more costly remediation measures are
necessary than those believed to be probable based on current facts and
circumstances, actual costs may exceed the reserves provided. However, based on
the information currently available, management does not believe that the
outcome of these matters will have a material adverse effect on its future
results of operations or financial condition.
For discussion of certain legal proceedings in a case filed in the
Circuit Court of Jefferson County, Alabama against the Alabama Power Company,
Russell Corporation, the Company and certain other parties, see Item 3 "Legal
Proceedings" in the Company's Annual Report on Form 10-K for the fiscal year
ended August 28, 1998 and Part II - Other Information, Item 1 "Legal
Proceedings" in the Company's Quarterly Report on Form 10-Q for the period ended
November 27, 1998.
The Company is also a party to other litigation incidental to its
business from time to time. The Company is not currently a party to any
litigation other than as referenced above, that management, in consultation with
legal counsel, believes, if determined adversely to the Company, would have a
material adverse effect on the Company's financial condition or results of
operations.
6
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Thirteen Weeks Ended February 26, 1999 Compared to Thirteen Weeks Ended
February 27, 1998
NET SALES. Net sales decreased 17.5% to $206.5 million for the thirteen
weeks ended February 26, 1999 from $250.3 million for the thirteen weeks ended
February 27, 1998.
Apparel fabric sales decreased 8.3% to $147.6 million for the thirteen
weeks ended February 26, 1999 from $160.9 million for the thirteen weeks ended
February 27, 1998. This decrease in sales was the result of a 2.6% decrease in
yards sold and a 5.9% decline in average selling prices. The decline in yards
sold and average selling prices reflected continued weakness in demand for basic
indigo denim fabrics and excess denim production capacity worldwide due to soft
international consumer demand. Workwear fabrics also experienced some softness
in demand due to the generally mild winter in many parts of the country. These
declines were partially offset by strong fashion demand for khaki and other
pant-weight cotton fabrics.
Greige and specialty fabric sales decreased 10.6% to $15.8 million for
the thirteen weeks ended February 26, 1999 from $17.7 million for the thirteen
weeks ended February 27, 1998. This decrease reflected a 2.8% decrease in units
sold and an 8.0% decrease in average selling prices for those units. The
decrease in units sold and average selling prices was primarily the result of
softening demand for greige and specialty fabrics in the apparel, tent and
marine products industries.
Yarn sales decreased 39.8% to $43.2 million for the thirteen weeks
ended February 26, 1999 from $71.7 million for the thirteen weeks ended
February 27, 1998. This decrease reflected a 27.9% decrease in pounds sold and
a 16.4% decrease in average selling prices. The decrease in pounds sold was
partly the result of the Company's decision to significantly increase the
consumption of internally produced yarn within the Company's weaving
facilities, thereby reducing dependence on outside yarn sourcing. Market demand
and pricing for sales yarns also remained very competitive, reflecting
continued excess production capacity within the industry and increased imports
of yarn and knitted apparel from Asia.
COST OF GOODS SOLD. Cost of goods sold decreased 14.6% to $180.0
million for the thirteen weeks ended February 26, 1999 from $210.8 million for
the thirteen weeks ended February 27, 1998. Cost of goods sold as a percentage
of net sales increased to 87.2% for the thirteen weeks ended February 26, 1999
from 84.2% for the thirteen weeks ended February 27, 1998. While raw material
costs were generally lower during this period, payments received by the Company
from the U.S. Department of Agriculture under a program to ensure
competitively-priced U.S. cotton ceased, as funding for the program was
exhausted. This may result in net higher raw material costs over the balance of
the fiscal year. The Company has continued efforts to reduce unit costs through
strategic capital expenditure projects. However, reduced capacity utilization
and a corresponding reduction in absorption of fixed manufacturing costs
resulted in increased unit costs during the thirteen weeks ended February 26,
1999.
SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative
expenses decreased 18.7% to $9.3 million for the thirteen weeks ended
February 26, 1999 from $11.5 million for the thirteen weeks ended February 27,
1998. This decrease reflects continued expense reduction efforts, and reduced
charges for certain associate benefits and performance based incentives
corresponding with the reduced results of operations of the Company for the
period. Selling and administrative expenses as a percentage of net sales
decreased to 4.5% for the thirteen weeks ended February 26, 1999 from 4.6% for
the thirteen weeks ended February 27, 1998.
INTEREST EXPENSE, NET. Interest expense, net increased 1.6% to $5.8
million for the thirteen weeks ended February 26, 1999 from $5.7 million for the
thirteen weeks ended February 27, 1998. This increase reflected slightly higher
average outstanding borrowings during the thirteen weeks ended February 26,
1999.
7
<PAGE> 10
RESULTS OF OPERATIONS (CONT.)
DISCOUNT AND EXPENSES ON SALE OF RECEIVABLES. Discount and expenses on
sale of receivables were $1.4 million for the thirteen weeks ended February 26,
1999 compared to $1.7 million for the thirteen weeks ended February 27, 1998.
This decrease was primarily attributable to a net decrease in the amount of
receivables sold under the facility.
PROVISION FOR INCOME TAXES. The Company recorded a benefit from income
taxes of $0.1 million for the thirteen weeks ended February 26, 1999 compared to
a provision for income taxes of $4.3 million for the thirteen weeks ended
February 27, 1998, reflecting the loss before taxes for the quarter.
Twenty-Six Weeks Ended February 26, 1999 Compared to Twenty-Six Weeks Ended
February 27, 1998
NET SALES. Net sales decreased 17.2% to $430.0 million for the
twenty-six weeks ended February 26, 1999 from $519.1 million for the twenty-six
weeks ended February 27, 1998.
Apparel fabric sales decreased 9.2% to $308.9 million for the
twenty-six weeks ended February 26, 1999 from $340.2 million for the twenty-six
weeks ended February 27, 1998. This decrease in sales was the result of a 5.3%
decrease in yards sold and a 4.1% decline in average selling prices. The decline
in yards sold and average selling prices reflected continued weakness in demand
for basic indigo denim fabrics and excess denim production capacity worldwide
due to soft international consumer demand. Workwear fabrics also experienced
some softness in demand due to the generally mild winter in many parts of the
country. These declines were partially offset by strong fashion demand for khaki
and other pant-weight cotton fabrics.
Greige and specialty fabric sales decreased 15.9% to $29.2 million for
the twenty-six weeks ended February 26, 1999 from $34.7 million for the
twenty-six weeks ended February 27, 1998. This decrease reflected a 9.4%
decrease in units sold and a 7.2% decrease in average selling prices for those
units. The decrease in units sold and average selling prices was primarily the
result of softening demand for greige and specialty fabrics in the apparel, tent
and marine products industries.
Yarn sales decreased 36.2% to $91.9 million for the twenty-six weeks
ended February 26, 1999 from $144.1 million for the twenty-six weeks ended
February 27, 1998. This decrease reflected a 27.7% decrease in pounds sold and a
11.8% decrease in average selling prices. The decrease in pounds sold was partly
the result of the Company's decision to significantly increase the consumption
of internally produced yarn within the Company's weaving facilities, thereby
reducing dependence on outside yarn sourcing. Market demand and pricing for
sales yarns also remained very competitive, reflecting continued excess
production capacity within the industry and increased imports of yarn and
knitted apparel from Asia.
COST OF GOODS SOLD. Cost of goods sold decreased 16.1% to $366.1
million for the twenty-six weeks ended February 26, 1999 from $436.1 million for
the twenty-six weeks ended February 27, 1998. Cost of goods sold as a percentage
of net sales increased to 85.1% for the twenty-six weeks ended February 26, 1999
from 84.0% for the twenty-six weeks ended February 27, 1998, primarily due to
the impact of lower average selling prices, partially offset by lower raw
material costs. While raw material costs were generally lower during this
period, payments received by the Company from the U.S. Department of Agriculture
under a program to ensure competitively-priced U.S. cotton ceased, as funding
for the program was exhausted. This may result in net higher raw material costs
over the balance of the fiscal year. The Company has continued efforts to reduce
unit costs through strategic capital expenditure projects. However, reduced
capacity utilization and a corresponding reduction in absorption of fixed
manufacturing costs resulted in increased unit costs during the twenty-six weeks
ended February 26, 1999.
SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative
expenses decreased 11.4% to $20.1 million for the twenty-six weeks ended
February 26, 1999 from $22.7 million for the twenty-six weeks ended February 27,
1998. This decrease reflects continued expense reduction efforts, and reduced
charges for certain associate benefits and performance based incentives
corresponding with the reduced results of operations of the Company during the
period. Selling and administrative expenses as a percentage of net sales
increased to 4.7% for the twenty-six weeks ended February 26, 1999 from 4.4% for
the twenty-six weeks ended February 27, 1998, reflecting the impact of lower
sales.
8
<PAGE> 11
RESULTS OF OPERATIONS (CONT.)
INTEREST EXPENSE, NET. Interest expense, net remained constant at $11.4
million for the twenty-six weeks ended February 26, 1999 and February 27, 1998.
DISCOUNT AND EXPENSES ON SALE OF RECEIVABLES. Discount and expenses on
sale of receivables were $3.1 million for the twenty-six weeks ended February
26, 1999 compared to $3.8 million for the twenty-six weeks ended February 27,
1998. This decrease was primarily attributable to a net decrease in the amount
of receivables sold under the facility.
PROVISION FOR INCOME TAXES. Provision for income taxes decreased to
$3.2 million for the twenty-six weeks ended February 26, 1999 from $10.1 million
for the twenty-six weeks ended February 27, 1998. The Company's effective tax
rate was 39.2% for the twenty-six weeks ended February 26, 1999 compared to
40.0% for the twenty-six weeks ended February 27, 1998.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $26.9 million for the
twenty-six weeks ended February 26, 1999. Principal working capital changes
included a $34.3 million decrease in Accounts Receivable, a $23.9 million
increase in Inventories, and a $9.1 million decrease in Accounts Payable and
Accrued Expenses. Investing activities were predominantly equipment purchases
and plant improvements of $27.0 million made in connection with the on-going
modernization of the Company's manufacturing facilities. Financing activities
included a $23.9 million net advance under the revolving line of credit, payment
of $2.5 million in dividends on outstanding common stock, and a $25.0 million
decrease in Accounts Receivable sold under the securitization facility.
At February 26, 1999, the Company had borrowings of $135.3 million
outstanding under its revolving line of credit and $64.7 million of borrowing
availability thereunder.
The Company's capital expenditures, aggregating $27.0 million for the
twenty-six weeks ended February 26, 1999, were used to fund the expansion and
modernization of weaving and finishing facilities in South Carolina and other
equipment purchases. Management estimates that capital expenditures for the
balance of fiscal 1999 will be approximately $20.0 million, and that such
amounts will be used primarily to improve fabric finishing facilities.
Management believes that cash generated from operations, together with
borrowings available under its revolving line of credit and proceeds received in
connection with sales of trade receivables, will be sufficient to meet the
Company's working capital and capital expenditure needs in the foreseeable
future.
9
<PAGE> 12
OTHER DATA
EBITDA, which is presented not as an alternative measure of operating
results or cash flow from operations (as determined in accordance with generally
accepted accounting principles) but because it is a widely accepted financial
indicator of the ability to incur and service debt, is calculated by the Company
as follows (amounts in thousands):
<TABLE>
<CAPTION>
TWENTY-SIX WEEKS ENDED
-------------------------
FEB. 27, FEB. 26,
1998 1999
-------- --------
<S> <C> <C>
Net income $ 15,085 $ 4,906
Interest expense 11,371 11,449
Discount and expenses on sale of receivables 3,846 3,122
Provision for income taxes 10,060 3,160
Depreciation and amortization 19,858 21,076
Net change in allowance to reduce carrying
value of inventory to LIFO basis (300) --
-------- -------
EBITDA $ 59,920 $43,713
======== =======
</TABLE>
EBITDA as calculated by the Company is not necessarily comparable with
similarly-titled measures presented by other companies.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
For discussion of certain market risks related to the Company see Part
I, Item 7a. "Quantitative and Qualitative Disclosures about Market Risk" in the
Company's Annual Report on Form 10-K for fiscal year ended August 28, 1998.
10
<PAGE> 13
AVONDALE INCORPORATED
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
For discussion of certain legal proceedings related to the
Company see Part II - Other Information, Item 1 "Legal
Proceedings" in the Company's Quarterly Report on Form 10-Q
for the period ended November 27, 1998.
Item 2. Changes in Securities and Use of Proceeds
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule - Twenty-Six weeks ended
February 26, 1999. (for SEC use only)
(b) Reports on Form 8-K
None
11
<PAGE> 14
SIGNATURE
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.
AVONDALE INCORPORATED
By: /s/ JACK R. ALTHERR, JR.
------------------------------
Jack R. Altherr, Jr.
Vice Chairman and Chief
Financial Officer
Date: April 9, 1999
-------------
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS OF AVONDALE INCORPORATED FOR THE TWENTY-SIX
WEEKS ENDED FEBRUARY 26, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-27-1999
<PERIOD-END> FEB-26-1999
<CASH> 5,424
<SECURITIES> 0
<RECEIVABLES> 53,212
<ALLOWANCES> 2,642
<INVENTORY> 138,588
<CURRENT-ASSETS> 199,183
<PP&E> 546,973
<DEPRECIATION> (288,062)
<TOTAL-ASSETS> 479,940
<CURRENT-LIABILITIES> 71,606
<BONDS> 267,500
0
0
<COMMON> 127
<OTHER-SE> 102,287
<TOTAL-LIABILITY-AND-EQUITY> 479,940
<SALES> 430,028
<TOTAL-REVENUES> 430,028
<CGS> 366,084
<TOTAL-COSTS> 407,112
<OTHER-EXPENSES> 3,401
<LOSS-PROVISION> 607
<INTEREST-EXPENSE> 11,449
<INCOME-PRETAX> 8,066
<INCOME-TAX> 3,160
<INCOME-CONTINUING> 4,906
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,906
<EPS-PRIMARY> .39
<EPS-DILUTED> .38
</TABLE>
