SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED)
For the transition period from ________ to ________
Commission file number 33-94154
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Foamex L.P. 401(k) Savings Plan
1000 Columbia Avenue
Linwood, Pennsylvania 19061
610-859-3000
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Foamex International Inc.
1000 Columbia Avenue
Linwood, Pennsylvania 19061
610-859-3000
Page 1 of 19 Pages
<PAGE>
REQUIRED INFORMATION
<TABLE>
<CAPTION>
<S> <C>
The following financial statements for the Foamex L.P. 401(k) Savings Plan are being filed herewith:
Report of Independent Accountants 6
Financial Statements:
Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1998 7
Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1997 8
Statement of Changes in Net Assets Available for Benefits with Fund Information for the year
ended December 31, 1998 9
Statement of Changes in Net Assets Available for Benefits with Fund Information for the year
ended December 31, 1997 10
Notes to Financial Statements 11
Supplemental Schedules:
Line 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1998 16
Line 27d - Schedule of Reportable Transactions for the year ended December 31, 1998 17
The following exhibit is being filed herewith:
Exhibit No. Description
1 Consent of Independent Accountants 19
</TABLE>
Page 2 of 19 Pages
<PAGE>
SIGNATURES
The Plan - Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
FOAMEX L.P. 401(k) SAVINGS PLAN
(Name of Plan)
Dated: June 30, 1999 By:/s/ George L. Karpinski
-------------------------------
George L. Karpinski
Senior Vice President, Treasurer and
Assistant Secretary
Page 3 of 19 Pages
<PAGE>
FOAMEX L.P. 401(k) SAVINGS PLAN
REPORT ON AUDITS OF FINANCIAL STATEMENTS
for the years ended December 31, 1998 and 1997
AND SUPPLEMENTAL SCHEDULES
for the year ended December 31, 1998
Page 4 of 19 Pages
<PAGE>
FOAMEX L.P. 401(k) SAVINGS PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Page
Report of Independent Accountants 6
Financial Statements:
Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1998 7
Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1997 8
Statement of Changes in Net Assets Available for Benefits with Fund Information for the year
ended December 31, 1998 9
Statement of Changes in Net Assets Available for Benefits with Fund Information for the year
ended December 31, 1997 10
Notes to Financial Statements 11
Supplemental Schedules:
Line 27a - Schedule of Assets Held for Investment Purposes as of December 31, 1998 16
Line 27d - Schedule of Reportable Transactions for the year ended December 31, 1998 17
</TABLE>
Page 5 of 19 Pages
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Plan Administrator of the
Foamex L.P. 401(k) Savings Plan:
We have audited the accompanying statements of net assets available for benefits
of the Foamex L.P. 401(k) Savings Plan (the "Plan") as of December 31, 1998 and
1997, and the related statements of changes in net assets available for benefits
for the years then ended. These financial statements and schedules are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1998 and 1997, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The supplemental schedules listed in the
accompanying table of contents, are presented for the purpose of additional
analysis and are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. The fund information in the statements of net assets
available for benefits and the statements of changes in net assets available for
benefits is presented for purposes of additional analysis rather than to present
the net assets available for plan benefits and changes in net assets available
for plan benefits of each fund. The supplemental schedules and fund information
have been subjected to the auditing procedures applied in the audits of the
basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
June 25, 1999
Page 6 of 19 Pages
<PAGE>
<TABLE>
<CAPTION>
FOAMEX L.P. 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
as of December 31, 1998
Neuberger
Morely Fidelity Vanguard & Berman
Capital Puritan Windsor Guardian
Fund Fund Fund Fund
Assets:
<S> <C> <C> <C> <C>
Investments, at fair value $ 15,979,112 $ 6,704,770 $ 19,160,385 $ 7,287,271
Participant loans receivable -- -- -- --
Employer contributions
receivable 58,627 26,307 59,021 30,049
Participant contributions
receivable 130,714 62,368 147,951 72,393
Interfund transfers receivable
(payable) (7,950) -- -- --
Other net receivable 14,980 -- 2,304 57
------------ ------------ ------------ ------------
Total assets 16,175,483 6,793,445 19,369,661 7,389,770
------------ ------------ ------------ ------------
Liabilities:
Administrative expenses payable 23,475 11,481 36,932 14,242
Other net payable -- 482 -- --
------------ ------------ ------------ ------------
Total liabilities 23,475 11,963 36,932 14,242
------------ ------------ ------------ ------------
Net assets available for benefits $ 16,152,008 $ 6,781,482 $ 19,332,729 $ 7,375,528
============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Janus Foamex Vanguard
Worldwide International Index 500 Participant
Fund Stock Fund Fund Loans Total
Assets:
<S> <C> <C> <C> <C> <C>
Investments, at fair value $ 7,375,557 $ 4,422,625 $ 2,952,107 $ -- $63,881,827
Participant loans receivable -- -- -- 2,814,327 2,814,327
Employer contributions
receivable 31,866 78,651 23,674 -- 308,195
Participant contributions
receivable 70,937 78,104 54,142 -- 616,609
Interfund transfers receivable
(payable) (2,532) -- 10,482 -- --
Other net receivable -- -- 230 -- 17,571
----------- ----------- ----------- ----------- -----------
Total assets 7,475,828 4,579,380 3,040,635 2,814,327 67,638,529
----------- ----------- ----------- ----------- -----------
Liabilities:
Administrative expenses payable 15,378 8,795 3,101 -- 113,404
Other net payable 348 107 -- -- 937
----------- ----------- ----------- ----------- -----------
Total liabilities 15,726 8,902 3,101 -- 114,341
----------- ----------- ----------- ----------- -----------
Net assets available for benefits $ 7,460,102 $ 4,570,478 $ 3,037,534 $ 2,814,327 $67,524,188
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 7 of 19 Pages
<PAGE>
FOAMEX L.P. 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
as of December 31, 1997
<TABLE>
<CAPTION>
Neuberger
Morely Fidelity Vanguard & Berman
Capital Puritan Windsor Guardian
Fund Fund Fund Fund
Assets:
<S> <C> <C> <C> <C>
Investments, at fair value $ 10,515,455 $ 4,441,304 $ 19,764,777 $ 5,196,113
Participant loans receivable -- -- -- --
Employer contributions
receivable 29,669 15,259 49,450 16,963
Participant contributions
receivable 66,468 34,241 118,127 41,204
Interfund transfers receivable
(payable) -- 11,919 (27,505) (11,919)
Other net receivable 2,528 2,647 10,840 --
------------ ------------ ------------ ------------
Total assets 10,614,120 4,505,370 19,915,689 5,242,361
------------ ------------ ------------ ------------
Liabilities:
Administrative expenses payable 2,431 2,891 14,054 3,834
Other net payable -- -- -- 28,472
------------ ------------ ------------ ------------
Total liabilities 2,431 2,891 14,054 32,306
------------ ------------ ------------ ------------
Net assets available for benefits $ 10,611,689 $ 4,502,479 $ 19,901,635 $ 5,210,055
============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Janus Foamex Vanguard
Worldwide International Index 500 Participant
Fund Stock Fund Fund Loans Total
Assets:
<S> <C> <C> <C> <C> <C>
Investments, at fair value $ 4,732,329 $ 3,391,430 $557,699 $ -- $48,599,107
Participant loans receivable -- -- -- 1,832,388 1,832,388
Employer contributions
receivable 16,517 66,260 2,711 -- 196,829
Participant contributions
receivable 42,835 64,270 4,541 -- 371,686
Interfund transfers receivable
(payable) 16,503 -- 11,002 -- --
Other net receivable 2,324 8,975 -- -- 27,314
----------- ----------- ----------- ----------- -----------
Total assets 4,810,508 3,530,935 575,953 1,832,388 51,027,324
----------- ----------- ----------- ----------- -----------
Liabilities:
Administrative expenses payable 3,528 2,228 71 -- 29,037
Other net payable -- -- 6,689 -- 35,161
----------- ----------- ----------- ----------- -----------
Total liabilities 3,528 2,228 6,760 -- 64,198
----------- ----------- ----------- ----------- -----------
Net assets available for benefits $ 4,806,980 $ 3,528,707 $ 569,193 $ 1,832,388 $50,963,126
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 8 of 19 Pages
<PAGE>
FOAMEX L.P. 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the year ended December 31, 1998
<TABLE>
<CAPTION>
Neuberger
Morely Fidelity Vanguard & Berman
Capital Puritan Windsor Guardian
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Additions in net assets attributed to:
Interest and dividends $ 1,053 $ 661,953 $ 1,677,267 $ 633,026
Net appreciation/(depreciation)
in fair value of investments 731,468 124,699 (1,791,967) (975,057)
Participant contributions 1,023,726 550,291 1,517,056 680,047
Employer contributions 138,322 66,261 142,776 74,664
Rollover contributions 2,543 13,827 19,159 7,627
Transfers in from related plan 4,018,490 1,494,282 2,794,709 3,315,257
------------ ------------ ------------ ------------
Total additions 5,915,602 2,911,313 4,359,000 3,735,564
------------ ------------ ------------ ------------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants 1,599,884 695,875 2,019,874 687,767
Administrative expenses 81,404 35,896 140,082 41,626
------------ ------------ ------------ ------------
Total deductions 1,681,288 731,771 2,159,956 729,393
------------ ------------ ------------ ------------
Interfund transfers 1,306,005 99,461 (2,767,950) (840,698)
------------ ------------ ------------ ------------
Net increase (decrease) 5,540,319 2,279,003 (568,906) 2,165,473
------------ ------------ ------------ ------------
Net assets available for benefits,
beginning of year 10,611,689 4,502,479 19,901,635 5,210,055
------------ ------------ ------------ ------------
Net assets available for benefits,
end of year $ 16,152,008 $ 6,781,482 $ 19,332,729 $ 7,375,528
============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Janus Foamex Vanguard
Worldwide International Index 500 Participant
Fund Stock Fund Fund Loans Total
<S> <C> <C> <C> <C> <C>
ADDITIONS
Additions in net assets attributed to:
Interest and dividends $ 29,783 $ 16,338 $ 32,797 $ 215,343 $ 3,267,560
Net appreciation/(depreciation)
in fair value of investments 1,101,334 416,265 329,371 -- (63,887)
Participant contributions 664,586 866,037 354,183 -- 5,655,926
Employer contributions 69,322 307,290 56,780 -- 855,415
Rollover contributions 13,438 19,988 5,886 -- 82,468
Transfers in from related plan 984,443 -- -- 661,865 13,269,046
------------ ------------ ------------ ------------ ------------
Total additions 2,862,906 1,625,918 779,017 877,208 23,066,528
------------ ------------ ------------ ------------ ------------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants 631,286 235,071 48,086 208,116 6,125,959
Administrative expenses 40,860 30,622 9,017 -- 379,507
------------ ------------ ------------ ------------ ------------
Total deductions 672,146 265,693 57,103 208,116 6,505,466
------------ ------------ ------------ ------------ ------------
Interfund transfers 462,362 (318,454) 1,746,427 312,847 --
------------ ------------ ------------ ------------ ------------
Net increase (decrease) 2,653,122 1,041,771 2,468,341 981,939 16,561,062
------------ ------------ ------------ ------------ ------------
Net assets available for benefits,
beginning of year 4,806,980 3,528,707 569,193 1,832,388 50,963,126
------------ ------------ ------------ ------------ ------------
Net assets available for benefits,
end of year $ 7,460,102 $ 4,570,478 $ 3,037,534 $ 2,814,327 $ 67,524,188
============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 9 of 19 Pages
<PAGE>
FOAMEX L.P. 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the year ended December 31, 1997
<TABLE>
<CAPTION>
Neuberger
Morely Fidelity Vanguard & Berman
Capital Puritan Windsor Guardian
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
ADDITIONS
Additions in net assets attributed to:
Interest and dividends $ 113,631 $ 458,703 $ 3,404,344 $ 725,071
Net appreciation/(depreciation)
in fair value of investments 500,178 326,041 260,375 51,838
Participant contributions 827,608 389,064 1,390,693 512,170
Employer contributions 132,549 58,513 199,125 72,023
Rollover contributions 39,629 38,551 166,351 59,079
------------ ------------ ------------ ------------
Total additions 1,613,595 1,270,872 5,420,888 1,420,181
------------ ------------ ------------ ------------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants 1,090,627 368,673 1,642,634 291,289
Administrative expenses 68,855 25,170 102,037 33,629
------------ ------------ ------------ ------------
Total deductions 1,159,482 393,843 1,744,671 324,918
------------ ------------ ------------ ------------
Interfund transfers (919,843) 103,862 (482,766) (268,741)
------------ ------------ ------------ ------------
Net increase (decrease) (465,730) 980,891 3,193,451 826,522
Net assets available for benefits,
beginning of year 11,077,419 3,521,588 16,708,184 4,383,533
------------ ------------ ------------ ------------
Net assets available for benefits,
end of year $ 10,611,689 $ 4,502,479 $ 19,901,635 $ 5,210,055
============ ============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Janus Foamex Vanguard
Worldwide International Index 500 Participant
Fund Stock Fund Fund Loans Total
<S> <C> <C> <C> <C> <C>
ADDITIONS
Additions in net assets attributed to:
Interest and dividends $ 67 $ 479 $ 3,113 $ 129,774 $ 4,835,182
Net appreciation/(depreciation)
in fair value of investments 763,618 (1,211,705) (2,699) -- 687,646
Participant contributions 543,011 823,798 15,476 -- 4,501,820
Employer contributions 73,272 296,415 3,890 -- 835,787
Rollover contributions 156,359 36,015 26,291 -- 522,275
----------- ----------- ----------- ----------- -----------
Total additions 1,536,327 (54,998) 46,071 129,774 11,382,710
----------- ----------- ----------- ----------- -----------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants 334,315 268,753 48 115,753 4,112,092
Administrative expenses 25,950 13,246 221 -- 269,108
----------- ----------- ----------- ----------- -----------
Total deductions 360,265 281,999 269 115,753 4,381,200
----------- ----------- ----------- ----------- -----------
Interfund transfers (18,134) 442,984 523,391 619,247 --
----------- ----------- ----------- ----------- -----------
Net increase (decrease) 1,157,928 105,987 569,193 633,268 7,001,510
Net assets available for benefits,
beginning of year 3,649,052 3,422,720 -- 1,199,120 43,961,616
----------- ----------- ----------- ----------- -----------
Net assets available for benefits,
end of year $ 4,806,980 $ 3,528,707 $ 569,193 $ 1,832,388 $50,963,126
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 10 of 19 Pages
<PAGE>
FOAMEX L.P. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN
The following description of the Foamex L.P. 401(k) Savings Plan (the
"Plan") provides only general information. Participants should refer to the Plan
agreement for a more complete description of the Plan's provisions.
The Plan is a defined contribution plan and is available to eligible
employees of Foamex L.P., Foamex Carpet Cushion, Inc. and Foamex International
Inc. (collectively, the "Employer"). Eligible employees may enter the Plan on
the first of any month following thirty days from their date of hire. The Plan
sponsor is Foamex L.P., which is an indirect majority-owned subsidiary of Foamex
International Inc. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
Effective July 1, 1998, the defined contribution plan of Crain
Industries, Inc. ("Crain"), which was acquired by Foamex International Inc. on
December 23, 1997 and whose assets subject to its liabilities were contributed
to Foamex L.P. on such date, were merged into the Plan. The assets of Crain's
defined contribution plan were either liquidated and the cash proceeds were
transferred or shares of similar investments were transferred to the Plan. The
fair value of the assets transferred approximated $13.3 million.
Participants may contribute from 0% to 20% of their compensation, as
defined, to the Plan subject to limitations of the Internal Revenue Code.
Participants may also contribute amounts representing distributions from other
qualified plans. The Employer makes a quarterly matching contribution equal to
25% of each participant's quarterly contributions to the Plan up to the first 4%
of compensation contributed by the participants, and are available to
participants employed by the Employer on the last day of the quarter. The
Employer is required to make an additional quarterly contribution (the
"Additional Contribution") equal to 25% of each participant's quarterly
contributions which are invested in the Foamex International Stock Fund. The
Additional Contribution is non-participant directed and remains in the Foamex
International Stock Fund until the participant withdraws from the Plan. Total
non-participant directed assets were approximately $513,000 and $362,000 at
December 31, 1998 and 1997, respectively.
Non-union and some union participants are vested immediately in their
contributions and the Employer matching contributions plus actual earnings
thereon. Some participants who are members of collective bargaining unions are
vested immediately in their contributions and are vested in the Employer
matching contributions after five years of service. Forfeitures are used to
reduce future Employer matching contributions. There were forfeitures of
approximately $2,000 during 1998 and $0 during 1997.
Upon termination of employment, a participant (or their beneficiary) will
receive a lump-sum amount equal to the value of their account, if the value of
their account is less than $5,000 (see Note 3). An election to defer the
distribution until a later date (but no later than age 70 1/2) can be made for
those participants whose account balance exceeds $5,000. Participants who were
members of the former General Felt Industries, Inc. defined contribution plan
may elect to receive their distributions upon termination in equal monthly
installments over a period of time not to exceed the life expectancy of the
participant or their beneficiary.
Under certain circumstances, participants may borrow from their accounts
a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of
their account balance. Loan transactions are treated as a transfer to (from) the
investment fund to (from) the loan fund. The loans mature from one to five years
or up to 15 years if used for the purchase of a primary residence. The loans are
collateralized by the balance in the participant's account and bear interest at
an annual rate of prime, as defined, plus 1% as determined quarterly.
Although it has not expressed any intention to do so, the Employer has
the right under the Plan to terminate the Plan subject to the provisions set
forth under ERISA. If the Plan is terminated, the plan assets shall be
distributed to the participants in the full amount standing to their credit on
the date of such termination, less the administrative expenses as though each
participant had terminated employment.
A separate account is maintained for each participant. Investment income
of each fund is allocated to a participant's account based on the ratio of the
participant's balance of the fund to all participating accounts of the fund.
Plan investments, directed by the participants, are maintained in the seven
funds and participant loans described below:
Page 11 of 19 Pages
<PAGE>
FOAMEX L.P. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN (continued)
MORLEY CAPITAL FUND - A fund designed to provide consistent and
relatively predictable rates of return over time while preserving capital and
minimizing risk. Investments in this fund include investment contracts issued by
insurance companies and other financial institutions.
FIDELITY PURITAN FUND - A fund that seeks income consistent with
preservation of capital. The fund invests in a diversified array of high
yielding securities such as common stocks, preferred stocks, and bonds and may
also purchase foreign securities, zero-coupon bonds and indexed securities. The
relative holdings vary in response to changing market conditions.
VANGUARD WINDSOR FUND - A fund that seeks long-term growth of capital and
income; current income is secondary. The fund invests primarily in equity
securities selected on the basis of fundamental value.
NEUBERGER & BERMAN GUARDIAN FUND - A fund that seeks capital appreciation
as its primary objective; current income is secondary. The fund invests mostly
in common stocks of well-established companies using a value-oriented approach.
The fund may also invest in foreign securities and American Depository Receipts.
JANUS WORLDWIDE FUND - A fund that seeks long-term growth of capital
consistent with the preservation of capital. The fund invests nearly all of its
assets in the common stocks of foreign and domestic issuers. The fund usually
invests in approximately five countries, although it is permitted to invest in
fewer than five and may engage in futures and options strategies.
FOAMEX INTERNATIONAL STOCK FUND - A non-diversified stock fund that
invests solely in Foamex International Inc. common stock. All such shares are
purchased on the open market. In addition, the fund invests approximately 2% of
its balance in money market instruments that allows the fund to handle
exchanges, withdrawals, loans and disbursements.
VANGUARD INDEX 500 FUND - A fund that seeks long-term growth of capital
and income from dividends. The fund invests mostly in common stocks of
well-established companies using an indexed approach.
PARTICIPANT LOANS - Consists of loans to participants.
The Plan provides for various investment options in mutual funds, which
invest in any combination of stocks, bonds, fixed income securities, other
mutual funds, and other investment securities. Investment securities are exposed
to various risks, such as interest rate, market and credit. Due to the level of
risk associated with certain investment securities and the level of uncertainty
related to changes in the value of investment securities, it is at least
reasonably possible that changes in risks in the near term would materially
affect participants' account balances and the amounts reported in the statement
of net assets available for benefits and the statement of changes in net assets
available for benefits.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION - The accompanying financial statements of the Plan
are presented on the accrual basis of accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION - At December 31, 1998, the
Plan maintained a contract with The Wilmington Trust Company, the Plans
trustee/custodian, which provided for investment of contributions, at the
participants' direction, in various separate investment mutual funds and the
Foamex International Stock Fund. Participant loans are valued at cost, which
approximates fair value. The Plan's remaining investments are stated at fair
value as determined by published market quotes as of the date of valuation.
Purchases and sales of securities are recorded on the trade date.
Interest income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Page 12 of 19 Pages
<PAGE>
FOAMEX L.P. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
ADMINISTRATIVE EXPENSES - Administrative expenses for 1998 and 1997 were
paid by the Plan.
NET APPRECIATION (DEPRECIATION) IN FAIR VALUE OF INVESTMENTS - Net
appreciation (depreciation) in fair value of investments consists of realized
gains and losses and the net unrealized appreciation (depreciation) of the
Plan's investments.
PAYMENT OF BENEFITS - Benefit payments are recorded when paid.
3. PLAN AMENDMENTS
During 1998, the Plan was amended for the transfer of assets from the
Crain defined contribution plan (see Note 1). In addition, effective for the
Plan year beginning January 1, 1998, if a participant is terminated and the
value of the participant's account balance is less than $5,000, a lump sum
payment shall be made for the balance to that individual.
During 1997, the Plan was amended to (i) change the interest rate on
participant loans made on or after October 1, 1997 from prime rate, as defined,
plus 2%, to prime rate, as defined, plus 1%, and (ii) increase the maximum
participant contribution percentage from 15% of their compensation to 20% of
their compensation, subject to limitations of the Internal Revenue Code.
4. INVESTMENTS
The Plan's investments at December 31, 1998 and 1997 are as follows:
<TABLE>
<CAPTION>
1998 1997
---------------- ---------------
<S> <C> <C>
Morely Capital Fund $15,979,112 (1) $10,515,455 (1)
Fidelity Puritan Fund 6,704,770 (1) 4,441,304 (1)
Vanguard Windsor Fund 19,160,385 (1) 19,764,777 (1)
Neuberger & Berman Guardian Fund 7,287,271 (1) 5,196,113 (1)
Janus Worldwide Fund 7,375,557 (1) 4,732,329 (1)
Foamex International Stock Fund* 4,422,625 (1) 3,391,430 (1)
Vanguard Index 500 Fund 2,952,107 557,699
Participant Loans 2,814,327 1,832,388
------------ ------------
Total $66,696,154 $50,431,495
=========== ===========
</TABLE>
* Party-in-interest investment.
(1) Represents amounts in excess of 5% of net assets available for
benefits.
5. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of benefits paid to participants per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Benefits paid to participants per the financial statements $ 6,125,959 $ 4,112,092
Add: Amounts allocated to withdrawing participants - current year -- --
Less: Amounts allocated to withdrawing participants - prior year -- (288,502)
----------- -----------
Benefits paid to participants per the Form 5500 $ 6,125,959 $ 3,823,590
=========== ===========
</TABLE>
Page 13 of 19 Pages
<PAGE>
FOAMEX L.P. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
6. INCOME TAX STATUS
On August 12, 1998, the Internal Revenue Service issued a determination
letter that the Plan meets the requirements of Section 401 of the Internal
Revenue Code (the "Code") and is exempt from federal income taxes under Section
501(a) of the Code. The Plan has been amended (see Note 3) since receiving the
determination letter. However, the Plan administrator believes that the Plan is
designed and is currently being operated in compliance with the Code.
Page 14 of 19 Pages
<PAGE>
SUPPLEMENTAL SCHEDULES
Page 15 of 19 Pages
<PAGE>
<TABLE>
<CAPTION>
LINE 27a
FOAMEX L.P. 401(k) SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
as of December 31, 1998
<S> <C> <C>
Party-in Fair
Interest Description of Investment Cost Value
N/A Morely Capital Fund $14,665,010 $15,979,112
N/A Fidelity Puritan Fund 6,212,406 6,704,770
N/A Vanguard Windsor Fund 19,550,314 19,160,385
N/A Neuberger & Berman Guardian Fund 8,426,246 7,287,271
N/A Janus Worldwide Fund 5,937,382 7,375,557
* Foamex International Stock Fund 4,708,233 4,422,625
N/A Vanguard Index 500 Fund 2,671,841 2,952,107
N/A Participant loans, maturing through 2013 at an annual
interest rate of prime plus 2% or prime plus 1%. During
1998, interest rates ranged from 9.25% to 9.50% 2,814,327 2,814,327
------------- ------------
Total investments $64,985,759 $66,696,154
=========== ===========
</TABLE>
* Party-in interest investment
Page 16 of 19 Pages
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
LINE 27d
FOAMEX L.P. 401(k) SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 31, 1998
Current Value Net
of Assets on Realized
Purchase Selling Cost of Transaction Gain or
Description of Transaction Price Price Asset Date (Loss)
<S> <C> <C> <C> <C> <C>
Single Transactions: (1)
Purchase of Neuberger & Berman
Equity Trust Guardian Fund $5,708,163 N/A N/A $5,708,163 N/A
Purchase of Vanguard Windsor Fund 2,794,709 N/A N/A 2,794,709 N/A
Sale of Neuberger & Berman
Equity Funds Guardian Fund N/A $5,708,163 $4,975,312 $5,708,163 $732,851
Series of Transactions: (2)
Purchase of Morely Capital Fund 6,013,850 N/A N/A 6,013,850 N/A
Purchase of Fidelity Puritan Fund 3,628,318 N/A N/A 3,628,318 N/A
Purchase of Vanguard Windsor Fund 6,981,119 N/A N/A 6,981,119 N/A
Purchase of Neuberger & Berman
Equity Trust Guardian Fund 6,398,684 N/A N/A 6,398,684 N/A
Purchase of Neuberger & Berman
Equity Funds Guardian Funds 922,142 N/A N/A 922,142 N/A
Purchase of Janus Investment Fund 4,342,238 N/A N/A 4,342,238 N/A
Purchase of Foamex International Inc.
Common Stock 4,065,346 N/A N/A 4,065,346 N/A
Purchase of Vanguard Index Trust
500 Portfolio 3,576,830 N/A N/A 3,576,830 N/A
Purchase of EB Short Term MM Fund 17,621,508 N/A N/A 17,621,508 N/A
Sale of Morley Capital Fund N/A 4,602,185 3,909,704 4,602,185 692,481
Sale of Fidelity Puritan Fund N/A 1,503,219 1,382,898 1,503,219 120,321
Sale of Vanguard Windsor Fund N/A 5,816,588 5,326,653 5,816,588 489,935
</TABLE>
Page 17 of 19 Pages
<PAGE>
<TABLE>
<CAPTION>
LINE 27d
FOAMEX L.P. 401(k) SAVINGS PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS, continued
for the year ended December 31, 1998
Current Value Net
of Assets on Realized
Purchase Selling Cost of Transaction Gain or
Description of Transaction Price Price Asset Date (Loss)
<S> <C> <C> <C> <C> <C>
Sale of Neuberger & Berman Equity
Trust Guardian Funds N/A $1,608,644 $1,959,644 $1,608,644 $(351,000)
Sale of Neuberger & Berman Equity
Funds Guardian Funds N/A 6,564,008 5,707,220 6,564,008 856,788
Sale of Janus Investment Fund N/A 2,488,691 2,146,645 2,488,691 342,047
Sale of Foamex International Inc.
Common Stock N/A 3,214,173 2,553,702 3,214,173 660,471
Sale of Vanguard Index Trust
500 Portfolio N/A 1,517,356 1,472,263 1,517,356 45,093
Sale of EB Short Term MM Fund N/A 17,290,655 17,290,655 17,290,655 --
Note: (1) This schedule presents single series transactions involving
securities of the same issue where the aggregate amount exceeds
5% of the beginning Plan value.
(2) This schedule presents series of transactions involving
securities of the same issue where the aggregate amount exceeds
5% of the beginning Plan value.
</TABLE>
Page 18 of 19 Pages
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
Foamex International Inc. on Form S-8 (file No. 33-94154) of our report dated
June 25, 1999 on our audits of the financial statements and schedules of the
Foamex L.P. 401(k) Savings Plan as of December 31, 1998 and December 31, 1997
and for the years ended, which is in this Annual Report on Form 11-K.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
June 25, 1999
Page 19 of 19 Pages
