SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
Commission file number 0-22624
FOAMEX INTERNATIONAL INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 05-0473908
- ------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1000 Columbia Avenue
Linwood, PA 19061
- --------------------- ----------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (610) 859-3000
---------------
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
--- ---
The number of shares of the registrant's common stock outstanding as of May 1,
1996 was 25,439,648.
Page 1 of 22
Exhibit List on Page 15 of 22
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FOAMEX INTERNATIONAL INC.
INDEX
<TABLE>
<CAPTION>
Page
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<S> <C>
Part I. Financial Information:
Item 1. Financial Statements
Condensed Consolidated Statements of Operations - Thirteen Week
Periods Ended March 31, 1996 and April 2, 1995 3
Condensed Consolidated Balance Sheets as of March 31, 1996 and December 31, 1995 4
Condensed Consolidated Statements of Cash Flows - Thirteen Week Periods Ended
March 31, 1996 and April 2, 1995 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 9
Part II. Other Information 15
Exhibit List 15
Signatures 22
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
<TABLE>
<CAPTION>
13 Week Periods Ended
-------------------------------
March 31, April 2,
1996 1995
--------- ---------
(thousands except per share amounts)
<S> <C> <C>
NET SALES $318,242 $329,818
COST OF GOODS SOLD 265,472 277,103
-------- --------
GROSS PROFIT 52,770 52,715
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 22,363 23,912
-------- --------
INCOME FROM OPERATIONS 30,407 28,803
INTEREST AND DEBT ISSUANCE EXPENSE 19,866 20,528
OTHER INCOME (EXPENSE), NET (106) 284
-------- ---------
INCOME BEFORE PROVISION FOR INCOME TAXES 10,435 8,559
PROVISION FOR INCOME TAXES 4,298 3,498
-------- --------
NET INCOME $ 6,137 $ 5,061
======== ========
EARNINGS PER SHARE $ 0.24 $ 0.19
========= ========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 25,950 26,716
======== ========
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
3
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1996 1995
----------- ----------
CURRENT ASSETS: (thousands)
<S> <C> <C>
Cash and cash equivalents $ 11,368 $ 6,162
Accounts receivable, net 180,204 166,036
Inventories 131,355 130,676
Other current assets 44,431 43,992
---------- ----------
Total current assets 367,358 346,866
PROPERTY, PLANT AND EQUIPMENT, NET 321,516 324,274
COST IN EXCESS OF ASSETS ACQUIRED, NET 289,754 291,625
DEBT ISSUANCE COSTS, NET 28,990 29,998
OTHER ASSETS 18,394 20,389
---------- ----------
TOTAL ASSETS $1,026,012 $1,013,152
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 4,129 $ 2,199
Current portion of long-term debt 11,563 10,745
Accounts payable 100,216 108,101
Accrued interest 26,285 11,094
Accrued restructuring charges 16,988 19,303
Other accrued liabilities 61,630 56,216
---------- ----------
Total current liabilities 220,811 207,658
---------- ----------
LONG-TERM DEBT 715,193 719,417
---------- ----------
OTHER LIABILITIES 49,164 49,447
---------- ----------
MINORITY INTEREST 7,549 7,247
---------- ----------
COMMITMENTS AND CONTINGENCIES - -
---------- ----------
STOCKHOLDERS' EQUITY:
Preferred Stock, par value $1.00 per share:
Authorized 5,000,000 shares - none issued
Common Stock, par value $.01 per share:
Authorized 50,000,000 shares
Issued 26,738,348 and 26,715,960
shares, respectively; Outstanding 25,457,148 and
25,786,260 shares, respectively 267 267
Additional paid-in capital 84,180 84,015
Retained earnings (accumulated deficit) (30,902) (37,039)
Common Stock held in treasury, at cost; 1,281,200 shares at
March 31, 1996 and 929,700 shares
at December 31, 1995 (9,625) (7,167)
Other (10,625) (10,693)
----------- ----------
Total stockholders' equity 33,295 29,383
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,026,012 $1,013,152
========== ==========
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
4
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
<TABLE>
<CAPTION>
13 Week Periods Ended
------------------------------
March 31, April 2,
1996 1995
----------- -------
(thousands)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 6,137 $ 5,061
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 10,402 9,726
Amortization of debt issuance costs and debt discount 3,630 3,222
Provision for uncollectible accounts 315 312
Other operating activities 191 612
Changes in operating assets and liabilities, net of acquisitions (4,650) (11,558)
-------- -------
Net cash provided by operating activities 16,025 7,375
------- -------
INVESTING ACTIVITIES:
Capital expenditures (5,224) (9,246)
Acquisitions, net of cash acquired - (1,140)
Other investing activities 983 (479)
-------- --------
Net cash used for investing activities (4,241) (10,865)
--------- --------
FINANCING ACTIVITIES:
Net proceeds from (repayments of) short-term borrowings 1,930 (333)
Net repayments of revolving loans (3,466) (2,704)
Repayments of long-term debt (2,552) (2,728)
Purchase of treasury stock (2,458) -
Other financing activities (32) (23)
-------- --------
Net cash used for financing activities (6,578) (5,788)
------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 5,206 (9,278)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 6,162 49,099
-------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $11,368 $39,821
======= =======
</TABLE>
The accompanying notes are an integral part of the condensed
consolidated financial statements.
5
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Foamex International Inc.'s (the "Company") condensed consolidated balance
sheet as of December 31, 1995 has been condensed from the audited consolidated
balance sheet at that date. The condensed consolidated balance sheet as of March
31, 1996 and the condensed consolidated statements of operations and cash flows
for the thirteen week periods ended March 31, 1996 and April 2, 1995 have been
prepared by the Company and have not been audited by the Company's independent
accountants. In the opinion of management, all adjustments, consisting only of
normal recurring adjustments, considered necessary for a fair presentation of
the financial position, results of operations and cash flows have been included.
In October 1995, the Board of Directors of the Company approved a plan to
evaluate the potential reduction of long-term debt with substantially all of the
proceeds from the possible sale of the automotive carpet, trim and textile
businesses of JPS Automotive (which together comprise the automotive textiles
segment and substantially all of the assets of JPS Automotive) and the home
comfort products segment of Perfect Fit (which comprises substantially all of
the assets of Perfect Fit). The Company is continuing to evaluate the possible
sale of these business segments; however, no definitive commitment has been
reached. There can be no assurance that the Company will be able to successfully
sell these business segments or as to the price or terms of any sale. The
consolidated financial statements of the Company do not include any adjustments
that might result from any sale.
Certain information and note disclosures normally included in the financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted in accordance with the rules and regulations of
the Securities and Exchange Commission. These condensed consolidated financial
statements should be read in conjunction with the Company's 1995 consolidated
financial statements and notes thereto as set forth in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995.
2. INVENTORIES
The components of inventories consist of:
March 31, December 31,
1996 1995
----------- ---------
(thousands)
Raw materials and supplies $ 64,898 $ 68,848
Work-in-process 28,335 27,616
Finished goods 38,122 34,212
-------- ---------
Total $131,355 $130,676
======== ========
3. EARNINGS PER SHARE
Earnings per share is calculated by dividing net income by the weighted
average shares of common stock outstanding. For 1996, common stock equivalents
have been included in the weighted average shares of common stock outstanding
and amounted to approximately 232,000 shares. For 1995, common stock equivalents
have not been included in the weighted average shares of common stock
outstanding since the effect would be antidilutive.
6
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
4. ENVIRONMENTAL MATTERS
The Company has reported to appropriate state authorities that it has found
soil and groundwater contamination in excess of state standards at three
facilities and soil contamination in excess of state standards at four other
facilities. The Company has begun remediation and is conducting further
investigations into the extent of the contamination at these facilities and,
accordingly, the extent of the remediation that may ultimately be required. As
of March 31, 1996, the Company has environmental accruals of approximately $1.5
million for the remaining potential remediation costs for these facilities based
on engineering estimates.
Federal regulations require that by 1998 all underground storage tanks
("USTs") be removed or upgraded in most states to meet applicable standards. The
Company, like many other companies engaged in manufacturing, has USTs that will
require removal. Due to the age of many of the Company's approximately twelve
storage tanks, leakage has occurred from a few of these USTs resulting in soil
and possibly groundwater contamination. The Company has accrued costs of $0.5
million based on engineering estimates that the cost of removing the tanks and
remediation costs associated therewith ranges from approximately $0.4 million to
$1.1 million. However, the full extent of contamination and, accordingly, the
actual cost of such remediation cannot be predicted with any degree of certainty
at this time. The Company believes that its USTs do not pose a significant risk
of environmental liability because of the Company's monitoring practices for
USTs and conditional approval for permanent in-place closure for certain USTs.
However, there can be no assurance that such USTs will not result in significant
environmental liability in the future. Foamex L.P. has been designated as a
Potentially Responsible Party ("PRP") by the United States Environmental
Protection Agency (the "EPA") with respect to eleven sites, with an estimated
total liability to Foamex L.P. for the eleven sites of less than approximately
$0.2 million. Estimates of total cleanup costs and fractional allocations of
liability are generally provided by the EPA or the committee of PRP's with
respect to the specified site. In each case, the participation of Foamex L.P. is
considered to be immaterial.
As of March 31, 1996, the aggregate environmental liability amounts to $8.7
million, $1.9 million of which is included in current liabilities. In addition,
the Company has a receivable of $1.1 million, net of an allowance of
approximately $1.0 million relating to potential disagreements regarding the
scope of the indemnification, for indemnification of environmental liabilities
from former owners of Foamex L.P. and JPS Automotive L.P., $0.6 million of which
is included in current assets. The Company believes that realization of the
receivables established for indemnification is probable.
Although it is possible that new information or future developments could
require the Company to reassess its potential exposure relating to all pending
environmental matters, management believes that, based upon all currently
available information, the resolution of such environmental matters will not
have a material adverse effect on the Company's operations, financial position,
capital expenditures or competitive position. The possibility exists, however,
that new environmental legislation and/or environmental regulations may be
adopted, or other environmental conditions may be found to exist, that may
require expenditures not currently anticipated and that may be material.
5. LITIGATION
As of May 3, 1996, Foamex L.P. and Trace International Holdings Inc. ("Trace
Holdings") were two of multiple defendants in actions filed on behalf of
approximately 4,400 persons in various United States federal and state courts
and one Canadian provincial court by recipients of breast implants, some of
which allege substantial damages, but most of which allege unspecified damages
for personal injuries of various types. Five of these cases seek to allege
7
<PAGE>
FOAMEX INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
5. LITIGATION (continued)
claims on behalf of all breast implant recipients or other allegedly affected
parties, but no class has been approved or certified by the court. In addition,
three cases have been filed alleging claims on behalf of approximately 2,597
residents of Australia, New Zealand, England, and Ireland. During 1995, Foamex
L.P. and Trace Holdings were granted summary judgments and dismissed as
defendants from all cases in the federal courts of the United States and the
state courts of California. Appeals for these decisions were withdrawn and the
decisions final. In addition, two of the cases filed on behalf of 903 foreign
plaintiffs were dismissed on the grounds that the cases could not be brought in
the United States courts. This decision is subject to appeal. Foamex L.P.
believes that the number of suits and claimants may increase. Although breast
implants do not contain foam, certain silicone gel implants were produced using
a polyurethane foam covering fabricated by independent distributors or
fabricators from bulk foam purchased from Foamex L.P. or Trace Holdings. Neither
Foamex L.P. nor Trace Holdings recommended, authorized or approved the use of
its foam for these purposes. While it is not feasible to predict or determine
the outcome of these actions, based on management's present assessment of the
merits of pending claims, after consultation with the general counsel of Trace
Holdings, notwithstanding potential indemnity from the manufacturers of
polyurethane covered breast implants, management believes that the disposition
of matters that are pending or that may reasonably be anticipated to be asserted
should not have a material adverse effect on either Foamex L.P.'s or Trace
Holdings' consolidated financial position or results of operations. In addition,
Foamex L.P. is also indemnified by Trace Holdings for any such liabilities
relating to foam manufactured prior to capitalization of Foamex L.P. in October
1990. Although Trace Holdings has paid Foamex L.P.'s litigation expenses,
pursuant to such indemnification, and management believes Trace Holdings will be
in a position to continue to pay such expenses, there can be no assurance that
Trace Holdings will be able to provide such indemnification. Based on
information available at this time with respect to the potential liability,
notwithstanding the indemnification provided by Trace Holdings and the coverage
provided by Trace Holdings' and Foamex L.P.'s liability insurance, the Company
believes that the proceedings should not ultimately result in any liability that
would have a material adverse effect on the financial position or results of
operations of the Company. If management's assessment of Foamex L.P.'s liability
with respect to these actions is incorrect, such actions could have a material
adverse effect on the Company.
Foamex L.P. is one of multiple defendants in actions alleging bodily injury
and diminution in property value as a result of alleged violations of Tennessee
hazardous waste regulations at Foamex L.P.'s Morristown, Tennessee facilities.
Recticel Foam Corporation ("RFC") has indemnified Foamex L.P. with respect to
losses arising from certain events, such as this alleged violation, that had
occurred prior to October 2, 1990. Based on information available at this time
with respect to the potential liability, after consultation with the general
counsel of Trace Holdings, notwithstanding the indemnification provided by RFC,
the guaranty of such indemnification by RFC's parent company, Recticel s.a., and
the coverage provided by Foamex L.P.'s liability insurance, the Company believes
that the proceedings should not ultimately result in any liability that would
have a material adverse effect on the financial position or results of
operations of the Company. If management's assessment of Foamex L.P.'s liability
with respect to these actions is incorrect, such actions could have a material
adverse effect on the Company.
The Company is party to various other lawsuits, both as defendant and
plaintiff, arising in the normal course of business. It is the opinion of
management that the disposition of these lawsuits will not individually or in
the aggregate, have a material adverse effect on the financial position or
results of operations of the Company. If management's assessment of the
Company's liability with respect to these actions is incorrect, such actions
could have a material adverse effect on the Company's consolidated financial
position.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Foamex International Inc. (the "Company") operates in three business
segments: polyurethane foam products, automotive textiles and home comfort
products. The foam products segment consists of the Company's largest subsidiary
Foamex L.P., together with Foamex L.P.'s wholly-owned subsidiaries, General Felt
Industries, Inc., Foamex Fibers, Inc., Foamex Canada Inc. ("Foamex Canada"), and
Foamex Latin America, Inc. The automotive textiles segment consists of the
operations of JPS Automotive L.P. ("JPS Automotive"). The home comfort products
segment consists of the operations of Perfect Fit Industries, Inc. ("Perfect
Fit"). The following discussion should be read in conjunction with the condensed
consolidated financial statements and related notes thereto of the Company
included in this report.
In October 1995, the Board of Directors of the Company approved a plan to
evaluate the potential reduction of long-term debt with substantially all of the
proceeds from the possible sale of the automotive carpet, trim and textile
businesses of JPS Automotive (which together comprise the automotive textiles
segment and substantially all of the assets of JPS Automotive) and the home
comfort products segment of Perfect Fit (which comprises substantially all of
the assets of Perfect Fit). The Company is continuing to evaluate the possible
sale of these business segments; however, no definitive commitment has been
reached. There can be no assurance that the Company will be able to successfully
sell these business segments or as to the price or terms of any sale. The
consolidated financial statements of the Company do not include any adjustments
that might result from any sale.
In October 1995, the Board of Directors of the Company also approved an
operational plan to improve the profitability of the Company's foam products
segment. The operational plan consists of (i) reducing layers of management
through organizational realignment, (ii) the consolidation of thirteen foam
production, fabrication or branch locations, (iii) implementing additional
procedures to reduce manufacturing costs, including process redesign to
eliminate non-value added operations, (iv) reducing selling, general and
administrative expenses through cost containment and (v) reducing inventory
levels through improved forecasting and the effect of the plant consolidations.
The operational plan and other actions are expected to result in estimated
annualized savings in excess of $50.0 million, with expected savings in 1996 of
approximately $30.0 million of which it is estimated that the Company realized
$4.4 million of savings under the operational plan during the first quarter of
1996. The consolidation of the thirteen foam production, fabrication or branch
locations (referred to above) and the closure of two manufacturing facilities in
the home comfort products segment are collectively referred to herein as the
restructuring plan. As of March 31, 1996, the Company has closed twelve
locations included in the restructuring plan and it is expected that the
restructuring plan will be substantially completed by year end. There can be no
assurance that the Company will be able to successfully implement the
foregoing.(1)
The Company's automotive foam and automotive textiles customers are
predominantly automotive original equipment manufacturers or other automotive
suppliers. As such, the sales of these product lines are directly related to the
overall level of passenger car and light truck production in North America.
Also, the Company's sales are sensitive to sales of new and existing homes,
changes in personal disposable income and seasonality. The Company typically
experiences two seasonally slow periods during each year, in early July and in
late December, due to scheduled plant shutdowns and holidays.
(1) This paragraph contains forward-looking statements and should be read in
conjunction with the discussion regarding forward-looking statements set
forth on Page 5 of the Company's 1995 Annual Report on Form 10-K.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
13 Week Period Ended March 31, 1996 Compared to 13 Week Period Ended
April 2, 1995
Consolidated Results of Operations
Net sales for 1996 were $318.2 million as compared to $329.8 million in 1995.
The $11.6 million or 3.5% decrease in net sales was primarily due to a decrease
in automotive textiles segment net sales of $12.7 million associated with
reductions in the volume of automotive vehicles manufactured and the General
Motors Corp. parts supplier labor strike during the first quarter of 1996 offset
by an increase in net sales from the home comfort products segment. Net sales of
the foam products segment was fairly consistent for 1996 and 1995.
Gross profit as a percentage of net sales for 1996 increased to 16.6% from
16.0% in 1995 primarily due to improved gross profit margins in the foam
products segment offset by reduced gross profit margins in the automotive
textiles and home comfort products segments as discussed below.
Income from operations increased to $30.4 million for 1996 from $28.8 million
in 1995 primarily due to an increase in gross profit margins as discussed above
and a decrease in selling, general and administrative expenses of $1.6 million
for 1996 as compared to 1995. The decrease in selling, general and
administrative expenses is associated with reductions in salary, traveling and
professional costs.
Net income increased to $6.1 million or $0.24 per share for 1996 as compared
to $5.1 million or $0.19 per share in 1995. The increase is primarily due to (i)
the reasons cited above and (ii) a decrease in interest and debt issuance
expense of $0.7 million primarily due to favorable results from interest rate
swap agreements. The effective income tax rate was fairly consistent at 41.2%
for 1996 and 40.9% in 1995.
Operating results for 1996 are expected to be influenced by various internal
and external factors. These factors include, among other things, (i) the
implementation of an operational plan to improve the profitability of the foam
products segment, (ii) the completion of the consolidation of thirteen foam
production, fabrication or branch locations and the closure of two manufacturing
facilities in the home comfort products segment, (iii) the potential reduction
of long-term debt with substantially all of the proceeds from the possible sale
of the automotive textiles and home comfort products segments, (iv) additional
raw material price increases, if any, by the Company's chemical suppliers and
(v) the Company's success in passing on to its customers selling price increases
to recover previous raw material cost increases.(1)
Foam Products Segment Results of Operations
Net sales for 1996 were $218.1 million as compared to $218.2 million in 1995.
Carpet cushion net sales for 1996 decreased 6.5% to $63.5 million from $67.9
million in 1995 primarily due to reduced net sales volume of certain carpet
cushion products. Also, 1995 included net sales associated with a promotional
program that was not continued in 1996. Cushioning foam net sales for 1996
increased 7.5% to $81.5 million from $75.8 million in 1995 primarily due to the
April 1995 acquisition of a company which manufactures cushioning products,
increased net sales volume of bedding related products and increased selling
prices. Automotive foam net sales for 1996 decreased 4.6% to $56.0 million from
$58.7 million in 1995 primarily due to a reduction of automotive vehicle
production in 1996 as compared to 1995. Technical foam net sales for 1996
increased 8.2% to $17.1 million from $15.8 million in 1995 primarily due to
increased selling prices and increased net sales volume.
(1) This paragraph contains forward-looking statements and should be read
in conjunction with the discussion regarding forward-looking
statements set forth on Page 5 of the Company's Annual Report on Form
10-K.
10
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Gross profit as a percentage of net sales increased to 16.5% for 1996 from
15.0% in 1995 primarily due to selling price increases and improved material and
production efficiencies.
Income from operations increased to $22.4 million for 1996 from $19.8 million
in 1995 primarily due to improved gross profit margins as discussed above offset
by an increase of $0.7 million in selling, general and administrative expenses
for 1996 as compared to 1995 primarily due to management realignment under the
operational plan.
Automotive Textiles Segment Results of Operations
Net sales for 1996 decreased 14.5% to $74.9 million from $87.6 million in
1995 primarily due to reduced production of automobile and light truck builds in
1996 as compared to 1995 and the General Motors Corp. parts supplier labor
strike during the first quarter of 1996 which is estimated to have decreased net
sales by approximately $4.0 million. JPS Automotive's customers are
predominantly automotive original equipment manufacturers or other automotive
suppliers. As such, the sales of a substantial portion of JPS Automotive's
products are directly related to the overall level of passenger car and light
truck production in North America. The automotive industry is cyclical in nature
and is subject to changes in economic conditions. Consequently, a continued
reduction in consumer demand for vehicles will have a continued adverse impact
on JPS Automotive.
Gross profit as a percentage of net sales decreased to 16.7% for 1996 from
18.0% in 1995 primarily due to under utilization of manufacturing capacities as
a result of reduced net sales volume.
Income from operations for 1996 decreased 29.5% to $7.1 million from $10.1
million in 1995 primarily due to the reasons cited above. Selling, general and
administrative expenses decreased to $5.4 million for 1996 from $5.7 million in
1995; however, increased as a percentage of sales to 7.2% for 1996 from 6.5% in
1995. These changes were primarily due to the reduction in net sales volume.
Home Comfort Products Segment Results of Operations
Net sales for 1996 increased 5.0% to $25.2 million from $24.0 million in 1995
primarily due to increased net sales volume of decorative bedding products.
Gross profit as a percentage of net sales decreased to 16.9% for 1996 from 17.8%
in 1995 primarily due to competitive pricing pressures in the retail industry.
Income from operations increased to $1.2 million for 1996 from income of $0.8
million in 1995. Selling, general and administrative expenses as a percentage of
net sales decreased to 12.0% during 1996 from 14.6% in 1995 primarily due to the
elimination of certain benefits for an officer who resigned in February 1996.
Liquidity and Capital Resources
Liquidity
The Company's operating cash requirements consist principally of working
capital requirements, scheduled payments of principal and interest on
outstanding indebtedness and capital expenditures of the operating subsidiaries.
The Company believes that cash flow from operating activities, cash on hand and
periodic borrowings under its subsidiaries' revolving credit agreements,
primarily Foamex L.P. and JPS Automotive, if necessary, will be adequate to meet
operating cash requirements. The ability to meet the operating cash requirements
of the operating subsidiaries could be impaired if Foamex L.P. or JPS Automotive
were to fail to comply with any of the covenants contained in the Foamex L.P.
credit facility (the "Foamex L.P. Credit Facility") or the JPS Automotive credit
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
agreement (the "JPS Automotive Credit Agreement") and such noncompliance was not
cured by Foamex L.P. or JPS Automotive or waived by the lenders. Foamex L.P. and
JPS Automotive were in compliance with the covenants as of March 31, 1996 and
expects to be in compliance with the covenants for the foreseeable future. The
ability of Foamex L.P. and JPS Automotive to make distributions to the Company
is restricted by the terms of their respective financing agreements; therefore,
the Company is not expected to have access to the cash flow generated by these
operating subsidiaries for the foreseeable future.
Cash and cash equivalents increased $5.2 million during 1996 to $11.4 million
at March 31, 1996 from $6.2 million at December 31, 1995 primarily due to
improved operating results offset by capital expenditures, scheduled debt
repayments and purchases of treasury stock. Working capital increased $7.3
million during 1996 to $146.5 million at March 31, 1996 from $139.2 million at
December 31, 1995. The net operating assets and liabilities (comprised of
accounts receivable, inventories and accounts payable) increased $22.7 million
to $211.3 million at March 31, 1996 from $188.6 million at December 31, 1995
primarily due to an increase in accounts receivable and a decrease in accounts
payable. The increase in accounts receivable was primarily due to an increase in
net sales for March 1996 as compared to December 1995. In addition, accrued
interest increased approximately $15.2 million primarily due to an interest
payment due date in April 1996.
Cash Flow from Operating Activities
Cash flow from operating activities was $16.0 million and $7.4 million for
1996 and 1995, respectively. Cash flow from operating activities increased for
1996 as compared to 1995 primarily due to the reduced use of cash by the
operating assets and liabilities.
Cash Flow from Investing Activities
During 1996, the Company spent approximately $5.2 million on capital
expenditures and expects to maintain spending for capital expenditures at this
level for the foreseeable future.
During 1995, the Company made payments of approximately $1.1 million in
partial settlement of certain matters contained in the asset purchase agreement
in connection with the acquisition of JPS Automotive.
Cash Flow from Financing Activities
As of March 31, 1996, there were no outstanding revolving credit borrowings
under the Foamex L.P. Credit Facility and $0.9 million outstanding borrowings
under the JPS Automotive Credit Agreement with unused availability of
approximately $34.5 million and $24.1 million, respectively.
Borrowings by Foamex Canada as of March 31, 1996 were $4.1 million under a
revolving credit agreement with unused availability of approximately $0.3
million.
Cramerton Automotive Products L.P. ("Cramerton") finances its operations
through a $15.0 million revolving line of credit (the "Cramerton Credit
Facility"), which is recourse only to Cramerton, and expires in April 1997.
Availability under this revolving line of credit is subject to a borrowing
calculation and unused availability under this line of credit was $5.0 million
as of March 31, 1996.
During 1996, the Company purchased 351,500 shares of its common stock for an
aggregate cost of $2.5 million under programs authorized by the Board of
Directors to purchase up to 3.0 million shares of the Company's common stock.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Interest Rate Swap Agreements
The Company enters into interest rate swaps to lower funding costs and/or to
manage interest costs and exposure to changing interest rates. The Company does
not hold or issue financial instruments for trading purposes. Foamex L.P. has an
interest rate swap agreement with a notional amount of $150.0 million through
June 2000. Under the swap agreement, Foamex L.P. is obligated to make variable
payments based on LIBOR in exchange for fixed payments at a rate of 5.81% per
annum by the swap partner payable semiannually in arrears. Interest expense will
be subject to fluctuations in LIBOR. Foamex L.P. is exposed to credit loss in
the event of nonperformance by the swap partner; however, the occurrence of this
event is not anticipated.
Also, Foamex L.P. has an interest rate swap agreement, as amended, for a
notional amount of $150.0 million through December 1998. Under this agreement,
Foamex L.P. has made variable payments based on LIBOR with a cap of 5.5% and a
floor of 4.75% per annum for the six months ended in June 1995 and variable
payments based on LIBOR with a floor of 4.75% per annum for the six months ended
in December 1995 and is obligated to make fixed payments at a rate of 5.81% per
annum, for the remainder of the agreement, in exchange for variable payments by
the swap partner at the rate of LIBOR plus 0.80% per annum for the six months
ended in June 1995, LIBOR plus 0.72% per annum for the six months ended in
December 1995, LIBOR plus 1.89% per annum for the six months ended in June 1996,
LIBOR plus 1.83% per annum for the six months ended in December 1996 and 12.34%
per annum less LIBOR for the remainder of the term of the agreement, payable
semiannually in arrears. The swap partner has the ability to terminate the swap
agreement in December 1996. Foamex L.P. is exposed to credit loss in the event
of nonperformance by the swap partner; however, the occurrence of this event is
not anticipated. Interest expense will be subject to fluctuations in LIBOR. The
effect of the two interest rate swaps described above was a favorable adjustment
to interest expense of $0.8 million and $0.6 million for 1996 and 1995,
respectively.
JPS Automotive has an interest rate swap agreement, as amended in May 1995,
for a notional amount of $150.0 million for five years. Under this swap
agreement, JPS Automotive has paid fixed payments at 6.04% on a notional amount
of $90.0 million and 7.0% on a notional amount of $60.0 million for the six
months ended in June 1995 and is obligated to make variable rate payments based
on LIBOR, capped at 8.5% per annum, on $150.0 million notional amount for the
remainder of the agreement in exchange for fixed payments at a rate of 6.89% per
annum by the swap partner payable semiannually in arrears. The swap partner has
the ability to terminate the swap agreement in December 1998. Interest expense
will be subject to fluctuations in LIBOR. JPS Automotive is exposed to credit
loss in the event of nonperformance by the swap partner; however, the occurrence
of this event is not anticipated. During 1996, the effect of the interest rate
swap described above was a favorable adjustment to interest expense of $0.4
million. During 1995, the interest rate swap increased interest expense by $0.1
million.
Environmental Matters
The Company is subject to extensive and changing environmental laws and
regulations. Expenditures to date in connection with the Company's compliance
with such laws and regulations did not have a material adverse effect on
operations, financial position, capital expenditures or competitive position.
The amount of liabilities recorded by the Company in connection with
environmental matters as of March 31, 1996 was $8.7 million. In addition, as of
March 31, 1996, the Company has receivables of $1.1 million, net of $1.0 million
allowance relating to potential disagreements regarding the scope of the
indemnification, for indemnification of environmental liabilities from former
owners. Although it is possible that new information or future developments
could require the Company to reassess its potential exposure to all pending
environmental matters, including those described in the footnotes to the
Company's condensed consolidated financial statements, management believes that,
based upon all currently available information, the resolution of all such
pending environmental matters will not have a material adverse effect on the
Company's operations, financial position, capital expenditures or competitive
position.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The possibility exists, however, that new environmental legislation and/or
environmental regulations may be adopted, or other environmental conditions may
be found to exist, that may require expenditures not currently anticipated and
that may be material.
Inflation and Other Matters
There was no significant impact on the Company's operations as a result of
inflation for the periods presented. In some circumstances, market conditions or
customer expectations may prevent the Company from increasing the price of its
products to offset the inflationary pressures that may increase its costs in the
future.
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Part II - Other Information
Item 1. Legal Proceedings
Reference is made to the description of the legal proceedings
contained in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1995.
The information from Notes 4 and 5 of the condensed consolidated
financial statements of the Company as of March 31, 1996 (unaudited)
is incorporated herein by reference.
Item 2. Changes in Securities
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:
3.1(a) - Restated Certificate of Incorporation of the Company.
3.2(a) - By-laws of the Company.
4.1(b) - Indenture, dated as of June 3, 1993, among Foamex L.P. and
FCC, as joint and several obligors, General Felt, as Guarantor,
and Shawmut Bank, National Association ("Shawmut"), as trustee,
relating to $160,000,000 principal amount of 9 1/2% Senior
Secured Notes due 2000, including form of Senior Secured Note.
4.2(a) - First Supplemental Indenture, dated as of November 18, 1993,
among the Company and FCC, as Issuers, General Felt and Perfect
Fit, as Guarantors and Shawmut, as trustee, relating to the
Senior Secured Notes.
4.3(a) - Second Supplemental Indenture, dated as of December 14, 1993,
among the Company and FCC, as Issuers, the Company, General Felt
and Perfect Fit, as Guarantors and Shawmut, as trustee, relating
to the Senior Secured Notes.
4.4(b) - Company Pledge Agreement, dated as of June 3, 1993, by Foamex
L.P. in favor of Shawmut, as trustee for the holders of the
Senior Secured Notes.
4.5(b) - Company Pledge Agreement, dated as of June 3, 1993, by FCC in
favor of Shawmut, as trustee for the holders of the Senior
Secured Notes.
4.6(b) - Subsidiary Pledge Agreement, dated as of June 3, 1993, by
General Felt in favor of Shawmut, as trustee for the holders of
the Senior Secured Notes.
4.7(b) - Company Security Agreement, dated as of June 3, 1993, by
Foamex L.P. and FCC in favor of Shawmut, as trustee for the
holders of the Senior Secured Notes.
4.8(b) - Subsidiary Security Agreement, dated as of June 3, 1993, by
General Felt in favor of Shawmut, as trustee for the holders of
the Senior Secured Notes.
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4.9(b) - Collateral Assignment of Patents and Trademarks, dated as of
June 3, 1993, by Foamex L.P. in favor of Shawmut, as trustee for
the holders of the Senior Secured Notes.
4.10(b) - Collateral Assignment of Patents and Trademarks, dated as of
June 3, 1993, by FCC in favor of Shawmut, as trustee for the
holders of the Senior Secured Notes.
4.11(b) - Collateral Assignment of Patents and Trademarks, dated as of
June 3, 1993, by General Felt in favor of Shawmut, as trustee
for the holders of the Senior Secured Notes.
4.12(a) - Pledge Agreement of Perfect Fit, dated November 18, 1993, in
connection with the Senior Secured Notes.
4.13(c) - Indenture, dated as of October 13, 1992, among Foamex L.P.,
FCC, and The Connecticut National Bank, as trustee, relating to
$150,000,000 principal amount of 11 1/4% Senior Notes due 2002,
including form of Senior Note.
4.14(d) - First Supplemental Indenture, dated as of March 23, 1993,
among Foamex L.P. and FCC, as joint and several obligors,
General Felt, as Guarantor, and Shawmut Bank Connecticut,
National Association (formerly The Connecticut National Bank)
("Shawmut Connecticut"), as trustee, relating to the Senior
Notes.
4.15(a) - Second Supplemental Indenture, dated as of November 18, 1993,
among Foamex L.P. and FCC, as Issuers, General Felt and Perfect
Fit, as Guarantors, and Shawmut Connecticut, as trustee,
relating to the Senior Notes.
4.16(a) - Third Supplemental Indenture, dated as of December 14, 1993,
among Foamex L.P. and FCC, as Issuers, the Company, General Felt
and Perfect Fit, as Guarantors, and Shawmut Connecticut, as
trustee, relating to the Senior Notes.
4.17(m) - Fourth Supplemental Indenture, dated as of October 31, 1994,
among Foamex L.P. and FCC as Issuers, the Company as Parent
Guarantor, General Felt and Perfect Fit as Guarantors, and
Shawmut Connecticut, as Trustee, relating to the Senior Notes.
4.18(c) - Indenture, dated as of October 13, 1992, among Foamex L.P.,
FCC and Shawmut, as trustee, relating to $126,000,000 principal
amount of 11 7/8% Senior Subordinated Debentures due 2004,
including form of Senior Subordinated Debenture.
4.19(d) - First Supplemental Indenture, dated as of March 23, 1993,
among Foamex L.P. and FCC, as joint and several obligors,
General Felt, as Guarantor, and Shawmut, as trustee, relating to
the Senior Subordinated Debentures.
4.20(a) - Second Supplemental Indenture, dated as of November 18, 1993,
among Foamex L.P. and FCC, as Issuers, General Felt and Perfect
Fit, as Guarantors, and Shawmut, as trustee, relating to the
Senior Subordinated Debentures.
4.21(b) - Third Supplemental Indenture, dated as of December 14, 1993,
among Foamex L.P. and FCC, as Issuers, the Company, General Felt
and Perfect Fit, as Guarantors, and Shawmut, as trustee,
relating to the Senior Subordinated Debentures.
4.22(i) - Indenture, dated as of June 28, 1994, among FJPS and FJCC, as
Issuers, Trace Holdings, as guarantor, and Shawmut Connecticut,
as trustee, relating to $116,745,000 principal amount of Senior
Secured Discount Debentures due 2004, including form of Senior
Secured Discount Debenture.
4.23(m) - Pledge Agreement, dated as of June 28, 1994, made by FJPS in
favor of Shawmut, as collateral agent for the holders of the
Senior Secured Discount Debentures.
4.24(i) - Senior Note, dated June 28, 1994, in the aggregate principal
amount of $87,943,103.14 due July 1, 2006, executed by FJPS to
Foamex L.P.
4.25(m) - Pledge Agreement, dated as of June 28, 1994, among FJPS in
favor of Foamex L.P. to secure its obligations under its Senior
Note due 2006.
4.26(m) - Pledge Agreement, dated as of June 28, 1994, made by JPS
Automotive L.P. in favor of Foamex L.P. to secure FJPS's
obligations under its Senior Note due 2006.
4.27(g) - Indenture, between Products Corp. and Shawmut Connecticut, as
Trustee, relating to $180,000,000 principal amount of 11 1/8%
Senior Notes due 2001 (the "JPS Automotive Senior Notes"),
including form of the JPS Automotive Senior Note.
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4.28(j) - First Supplemental Indenture, dated as of October 5, 1994,
between Products Corp., JPS Automotive L.P., and Shawmut
Connecticut, as Trustee, relating to the JPS Automotive Senior
Notes due 2001.
4.29(q) - Commitment letter, dated July 18, 1995, from The Bank of Nova
Scotia to Foamex Canada Inc.
4.30(i) - Second Amended and Restated Credit Agreement, dated as of June
28, 1994, among Foamex L.P., General Felt, Perfect Fit, Trace
Foam, FMXI, Citibank, N.A., The Bank of Nova Scotia, the
institutions from time to time parties thereto as lenders, the
institutions parties thereto as issuing banks and Citibank, N.A.
and The Bank of Nova Scotia, as Administrative Agents (the
"Credit Agreement").
4.31(m) - First Amendment to Second Amended and Restated Credit
Agreement of Foamex L.P., dated as of August 19, 1994.
4.32(m) - Second Amendment to Second Amended and Restated Credit
Agreement of Foamex L.P., dated as of November 11, 1994.
4.33(m) - Third Amendment to Second Amended and Restated Credit
Agreement of Foamex L.P., dated as of February 8, 1995.
4.34(q) - Fourth Amendment to Second Amended and Restated Credit
Agreement of Foamex L.P., dated as of June 30, 1995.
4.35(t) - Fifth Amendment to Second Amended and Restated Credit
Agreement of Foamex L.P., dated February 27, 1996.
4.37(t) - Letter of Consent to Waiver to the Second Amended and Restated
Foamex L.P. Credit Agreement, dated December 31, 1995.
4.38(t) - Letter of Consent to Waiver to the Second Amended and Restated
Foamex L.P. Credit Agreement, dated January 25, 1996.
4.39(a) - Guaranties, dated November 18, 1993, executed by each of
Foamex L.P., General Felt, and Perfect Fit, as guarantor,
respectively, in favor of Citibank, N.A., as Administrative
Agent, for the ratable benefit of the lenders and the issuing
banks, guaranteeing the obligations of one another under the
Credit Agreement.
4.40(a) - Guaranty, dated November 18, 1993, executed by FCC in favor of
Citibank, N.A., as Administrative Agent, for the ratable benefit
of the lenders and the issuing banks, guaranteeing the
obligations of Foamex L.P., General Felt, and Perfect Fit under
the Credit Agreement.
4.41(i) - Amended and Restated Guaranty, dated as of June 28, 1994,
executed by the Company in favor of Citibank, N.A. and The Bank
of Nova Scotia, as Administrative Agents, for the ratable
benefit of the lenders and the issuing banks under the Credit
Agreement.
4.42(t) - First Amendment to Amended and Restated Guaranty, dated June
30, 1995, executed by the Company in favor of Citibank, N.A. and
The Bank of Nova Scotia, as Administrative Agents, for the
ratable benefit of the lenders and the issuing banks under the
Credit Agreement.
4.43(t) - Second Amendment to Amended and Restated Guaranty, dated
February 27, 1996, executed by the Company in favor of Citibank,
N.A. and The Bank of Nova Scotia, as Administrative Agents, for
the ratable benefit of the lenders and the issuing banks under
the Credit Agreement.
4.44(a) - Security Agreements, dated November 18, 1993, executed by each
of Foamex L.P., General Felt, Perfect Fit, and FCC,
respectively, and Citibank N.A., as Administrative Agent for the
lenders and the issuing banks under the Credit Agreement.
4.45(i) - Amendatory Agreement, dated as of June 28, 1994, among Foamex
L.P., General Felt, Perfect Fit, FCC, and Citibank, N.A., as
collateral agent under the Credit Agreement.
4.46(a) - Intercreditor Agreement, dated as of November 18, 1993, by and
between Citibank, N.A., as Administrative Agent under the Credit
Agreement and Shawmut, as trustee under the Foamex L.P. Senior
Secured Note Indenture.
4.47(j) - Amended and Restated Credit Agreement, dated October 5, 1994,
by and among, Products Corp., JPS Automotive, JPSGP Inc., the
institutions party thereto as Lenders, the institutions party
thereto as Issuing Banks, and Citibank, N.A. and The Bank of
Nova Scotia.
4.48(m) - First Amendment to the Amended and Restated Credit Agreement
of JPS Automotive, dated as of November 11, 1994.
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4.49(m) - Second Amendment to the Amended and Restated Credit Agreement
of JPS Automotive, dated as of February 8, 1995.
4.50(s) - Third Amendment to the Amended and Restated Credit Agreement
of JPS Automotive, dated as of February 27, 1996.
4.51(a) - Subordinated Promissory Note, dated as of May 6, 1993, in the
original principal amount of $7,014,864 executed by Foamex L.P.
to Rallis.
4.52(a) - Marely Loan Commitment Agreement, dated as of December 14,
1993, by and between the Company and Marely.
4.53(a) - DLJ Loan Commitment Agreement, dated as of December 14, 1993,
by and between the Company and DLJ Funding.
4.54(q) - Promissory Note, dated July 7, 1995, in the aggregate
principal amount of $4,372,516 executed by Trace Holdings to
Foamex L.P.
4.55(t) - Promissory Note, dated December 8, 1995, in the aggregate
principal amount of $2,000,000 executed by the Company to Foamex
L.P.
10.1(a) - Registration Rights Agreement, dated as of December 14, 1993,
by and among the Company and GBNY and, for certain limited
purposes as set forth therein, Trace Holdings and Trace Foam.
10.2(a) - Registration Rights Agreement, dated as of December 14, 1993,
by and among the Company and RFC and, for certain limited
purposes as set forth therein, Trace Holdings and Trace Foam.
10.3(a) - Registration Rights Agreement, dated as of December 14, 1993,
by and between the Company and Rallis.
10.4(a) - Registration Rights Agreement, dated as of December 14, 1993,
by and among the Company and DLJ Funding and, for certain
limited purposes as set forth therein, Trace Holdings and Trace
Foam.
10.5(a) - Registration Rights Agreement, dated as of December 14, 1993,
by and between the Company and FCD Sub, Inc.
10.6(a) - Registration Rights Agreement, dated as of December 14, 1993,
by and among the Company and Marely and, for certain limited
purposes as set forth therein, Trace Holdings and Trace Foam.
10.7(a) - Registration Rights Agreement, dated as of December 14, 1993,
by and between the Company and Trace Foam.
10.8(a) - Registration Rights Agreement, dated as of December 14, 1993,
by and between the Company and Trace Holdings.
10.9(a) - Registration Rights Agreement, dated as of November 18, 1993,
by and among the Company and the Investors which are signatories
thereto.
10.10(i) - Warrant Registration Rights Agreement, dated as of June 28,
1994, by and among the Company, DLJ and Smith Barney Inc.
10.11(i) - Senior Secured Discount Debenture Registration Rights
Agreement, dated as of June 28, 1994, among FJPS, FJCC,
Holdings, DLJ, and Smith Barney Inc.
10.12(h) - Warrant Agreement, dated as of June 28, 1994, between the
Company and Shawmut Bank.
10.13(b) - Interest Rate and Currency Exchange Agreement, dated as of
June 14, 1993, among Foamex L.P., FCC, and Salomon Brothers
Holdings Company Inc ("Salomon Holdings").
10.14(m) - Swap Agreement, dated as of March 31, 1994, and amended in
November 1994, by and between Foamex L.P., and Citibank, N.A.
10.15(t) - Amended Confirmation Letter Agreement, dated as of February 2,
1996, by and between Foamex L.P. and Citibank, N.A.
10.16(b) - Revised Swap Transaction Letter Agreement, dated as of June
10, 1993, among Foamex L.P., FCC and Salomon Holdings.
10.17(g) - Swap Agreement, dated as of June 30, 1994, by and between JPS
Automotive and Citibank, N.A.
10.18(p) - Revised Swap Transaction Letter Agreement, dated May 11, 1995,
among JPS Automotive Products Corporation, JPS Automotive, and
Citibank, N.A.
10.19(d) - Reimbursement Agreement, dated as of March 23, 1993, between
Trace Holdings and General Felt.
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10.20(d) - Shareholder Agreement, dated December 31, 1992, among
Recticel, s.a., Recticel Holding Noord B.V., Foamex L.P.,
Beamech Group Limited, LME-Beamech, Inc., James Brian Blackell,
and Prefoam AG relating to foam technology sharing arrangement.
10.21(e) - Asset Transfer Agreement, dated as of October 2, 1990, between
Trace Holdings and the Foamex L.P. (the "Trace Holdings Asset
Transfer Agreement").
10.22(e) - First Amendment, dated as of December 19, 1991, to the Trace
Holdings Asset Transfer Agreement.
10.23(e) - Amended and Restated Guaranty, dated as of December 19, 1991,
made by Trace Foam in favor of Foamex L.P.
10.24(e) - Asset Transfer Agreement, dated as of October 2, 1990, between
RFC and Foamex L.P. (the "RFC Asset Transfer Agreement").
10.25(e) - First Amendment, dated as of December 19, 1991, to the RFC
Asset Transfer Agreement.
10.26(e) - Schedule 5.03 to the RFC Asset Transfer Agreement (the "5.03
Protocol").
10.27(d) - The 5.03 Protocol Assumption Agreement, dated as of October
13, 1992, between RFC and Foamex L.P.
10.28(d) - Letter Agreement between Trace Holdings and Recticel regarding
the Recticel guaranty, dated as of July 22, 1992.
10.29(e) - Supply Agreement between Recticel s.a., formerly known as
Gechem s.a., and Foamex L.P., dated as of August 1, 1991.
10.30(i) - Supply Agreement, dated June 28, 1994, between Foamex L.P. and
the Company.
10.31(i) - First Amended and Restated Tax Sharing Agreement, dated as of
December 14, 1993, among Foamex L.P., Trace Foam, FMXI, and the
Company.
10.32(i) - Tax Sharing Agreement, dated as of June 28, 1994, among FJPS
and the Company.
10.33(d) - Trace Foam Management Agreement between Foamex L.P. and Trace
Foam, dated as of October 13, 1992.
10.34(i) - Affirmation Agreement re: Management Agreement, dated as of
December 14, 1993 between Foamex L.P. and Trace Foam.
10.35(r) - Aircraft Purchase Agreement, dated as of August 22, 1995, by
and between Trace Aviation and Foamex Aviation.
10.36(r) - Aircraft Sale, Lease and Operating Agreement, dated as of
August 22, 1995, by and between Trace Aviation and Trace
Holdings.
10.37(r) - Assumption/Aircraft Security Agreement, dated as of August 22,
1995, by and between Foamex Aviation and the CIT Group/Equipment
Financing, Inc. ("CIT Group").
10.38(r) - Collateral Assignment of Aircraft Leases and Aircraft Use
Agreements, dated as of August 22, 1995, by and between Foamex
Aviation and CIT Group.
10.39(r) - Guaranty by the Company in favor of CIT Group, dated as of
August 22, 1995.
10.40(r) - Aviation Guaranty Indemnity Agreement, dated as of August 22,
1995, by and between the Company and Trace Holdings.
10.41(e) - Salaried Incentive Plan of Foamex L.P. and Subsidiaries.
10.42(e) - Trace Holdings 1987 Nonqualified Stock Option Plan.
10.43(e) - Equity Growth Participation Program.
10.44(m) - General Felt Industries, Inc. Retirement Plan for Salaried
Employees, effective as of January 1, 1995.
10.45(e) - Foamex L.P. Salaried Retirement Plan (formerly known as the
Foamex L.P. Products, Inc. Salaried Employee Retirement Plan),
as amended, effective July 1, 1984.
10.46(e) - Foamex L.P. 401(k) Savings Plan dated January 1, 1989.
10.47(q) - Foamex/GFI 401(k) Savings Plan dated July 1, 1995.
10.48(a) - The Company's 1993 Stock Option Plan.
10.49(a) - The Company's Non-Employee Director Compensation Plan.
10.50(s) - Hourly Employees' Pension Plan of JPS Automotive Products Corp.
10.51(s) - Retirement Pension Plan for Employees of JPS Automotive L.P.
10.52(p) - Savings, Investment and Profit Sharing Plan of JPS Automotive
L.P., dated October 6, 1994.
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10.53(p) - First Amendment to Savings, Investment and Profit Sharing Plan
of JPS Automotive L.P., dated July 26, 1995.
10.54(a) - Employment Agreement, dated as of May 6, 1993, by and between
Foamex L.P. and Rallis.
10.55(f) - Employment Agreement, dated as of February 1, 1994, by and
between Foamex L.P. and William H. Bundy.
10.56(t) - Employment Agreement, dated as of June 26, 1995, by and
between Foamex L.P. and Salvatore J. Bonanno
10.57(j) - Employment Agreement, dated as of July 22, 1994, by and among
the Company, JPS Automotive, and Jerry Burns.
10.58(n) - Employment Agreement, dated as of August 4, 1994, by and
between the Company, JPS Automotive, and Robert Sparks.
10.59(s) - Employment Agreement, dated as of September 1, 1995 by and
between JPS Automotive and Dean Gaskins.
10.60(o) - Bonus Agreement, dated as of May 7, 1993, between the Company
and Robert Hay.
10.61(a) - Amended and Restated Put Option Agreement, dated as of
December 14, 1993, by and between Trace Holdings and Rallis.
10.62(f) - Stock Purchase Agreement, dated as of December 23, 1993, by
and between Transformacion de Espumas y Fieltros, S. A., the
stockholders which are parties thereto, and Foamex L.P.
10.63(g) - Asset Purchase Agreement, dated as of May 25, 1994, by and
among JPS Automotive, JPS Textile Group, Inc., the Company, JPS
Auto Inc., and JPS Converter & Industrial Corp. ("C&I").
10.64(g) - Services Agreement, by and between JPS Automotive and the
Company.
10.65(g) - Dunean Reciprocal Easement Agreement, by and between JPS
Automotive and C&I.
10.66(g) - Supply Agreement, by and among the Company and certain of its
affiliates and JPS Automotive.
10.67(g) - Tax Sharing Agreement, by and among JPS Automotive and its
partners.
10.68(g) - Financing Agreement, dated as June 4, 1993, by and between
Nationsbank of North Carolina, N.A. and Cramerton, as amended by
the First Amendment and Correction of Financing Agreement, dated
as of April 28, 1994.
10.69(n) - Second Amendment and Correction of Financing Agreement, dated
as of December 28, 1994, by and between Nationsbank of North
Carolina, N.A. and Cramerton.
10.70(s) - Third Amendment to Financing Agreement, dated December 12,
1995, by and between Nationsbank of North Carolina, N.A. and
Cramerton.
10.71(g) - Amended and Restated Agreement of Limited Partnership of
Cramerton Automotive Products, L.P., dated as of December 2,
1991.
10.72(m) - First Amendment to Amended and Restated Agreement of Limited
Partnership of Cramerton Automotive Products, L.P., dated as of
June 28, 1994.
10.73(m) - Second Amendment to Amended and Restated Agreement of Limited
Partnership of Cramerton Automotive Products, L.P., dated as of
October 5, 1994.
10.74(g) - Stockholders' Agreement, dated as of December 2, 1991, by and
among Cramerton Management Corp., JPS Group, and Seiren Co.,
Ltd. (the "Stockholders' Agreement").
10.75(m) - First Amendment to Stockholders' Agreement, dated as of June
28, 1994.
- ------------
(a) Incorporated herein by reference to the Exhibit to the Company's
Registration Statement on Form S-1, Registration No. 33-69606.
(b) Incorporated herein by reference to the Exhibit to the
Registration Statement of Foamex L.P. and FCC on Form S-4,
Registration No. 33-65158.
(c) Incorporated herein by reference to the Exhibit to the
Registration Statement of Foamex L.P., FCC and General Felt on
Form S-1, Registration Nos. 33-60888, 33-60888-01, and
33-60888-02.
20
<PAGE>
(d) Incorporated herein by reference to the Exhibit to the Form 10-K
Statement of Foamex L.P. and FCC for fiscal 1992.
(e) Incorporated herein by reference to the Exhibit to the
Registration Statement of Foamex L.P. and FCC on Form S-1,
Registration Nos. 33-49976 and 33-49976-01.
(f) Incorporated herein by reference to the Exhibit to the Form 10-K
of the Company for fiscal 1993.
(g) Incorporated herein by reference to the Exhibit to JPS
Automotive's Registration Statement on Form S-1, Registration No.
33-75510.
(h) Incorporated by reference to the Exhibit to the Form 10-Q of the
Company for the quarterly period ended July 3, 1994.
(i) Incorporated herein by reference to the Exhibit to the
Registration Statement of FJPS, FJCC, and the Company on Form
S-4, Registration No. 33-82028.
(j) Incorporated herein by reference to the Exhibit to the quarterly
report on Form 10-Q of JPS Automotive L.P. and JPS Automotive
Products Corp. for the fiscal quarter ended October 2, 1994.
(k) Incorporated herein by reference to the Exhibit to the quarterly
report on Form 10-Q of Foamex L.P. and FCC, and General Felt for
the fiscal quarter ended October 2, 1994.
(l) Incorporated herein by reference to the Exhibit in the
Registration Statement of the Company on Form S-3, Registration
No. 33-85488.
(m) Incorporated herein by reference to the Exhibit to the Form 10-K
of the Company for fiscal 1994.
(n) Incorporated herein by reference to the Exhibit to the Form 10-K
of JPS Automotive for fiscal 1994.
(o) Incorporated herein by reference to the Exhibit to the Form 10-K
of Foamex L.P. for fiscal 1994.
(p) Incorporated herein by reference to the Exhibit to the Form 10-Q
of JPS Automotive for the quarterly period ended July 2, 1995.
(q) Incorporated herein by reference to the Exhibit to the Form 10-Q
of Foamex L.P. for the quarterly period ended July 2, 1995.
(r) Incorporated herein by reference to the Exhibit to the Form 10-Q
of the Company for the quarterly period ended October 1, 1995.
(s) Incorporated herein by reference to the Exhibit to the Form 10-K
of JPS Automotive for fiscal 1995.
(t) Incorporated herein by reference to the Exhibit to the Form 10-K
of Foamex L.P. for fiscal 1995.
Certain instruments defining the rights of security holders have been
excluded herefrom in accordance with Item 601(b)(4)(iii) of Regulation S-K. The
Registrant hereby agrees to furnish a copy of any such instrument to the
Commission upon request.
(b) The Company filed the following Current Reports on Form 8-K:
None.
21
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FOAMEX INTERNATIONAL INC.
Date: May 9, 1996 By: /s/ Kenneth R. Fuette
------------------------
Kenneth R. Fuette
Chief Financial Officer and
Chief Accounting Officer
22
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0
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