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, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 (NO FEE REQUIRED)
For the transition period from to
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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 15 Pages
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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 as of December 31, 1999 and 1998 7
Statement of Changes in Net Assets Available for Benefits for the years ended
December 31, 1999 and 1998 8
Notes to Financial Statements 9
Supplemental Schedule:
Schedule H, Part IV, Item 4i - Schedule of Assets Held for Investment Purposes
as of December 31, 1999 14
The following exhibit is being filed herewith:
Exhibit No. Description
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1 Consent of Independent Accountants 15
</TABLE>
Page 2 of 15 Pages
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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 27, 2000 By: /s/ George L. Karpinski
------------------------------
George L. Karpinski
Senior Vice President, Treasurer and
Assistant Secretary
Page 3 of 15 Pages
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FOAMEX L.P. 401(k) SAVINGS PLAN
REPORT ON AUDITS OF FINANCIAL STATEMENTS
for the years ended December 31, 1999 and 1998
AND SUPPLEMENTAL SCHEDULE
for the year ended December 31, 1999
Page 4 of 15 Pages
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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 as of December 31, 1999 and 1998 7
Statement of Changes in Net Assets Available for Benefits for the years ended
December 31, 1999 and 1998 8
Notes to Financial Statements 9
Supplemental Schedule:
Schedule H, Part IV, Item 4i - Schedule of Assets Held for Investment Purposes
as of December 31, 1999 14
</TABLE>
Page 5 of 15 Pages
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Report of Independent Accountants
To the Participants and Administrator of the
Foamex L.P. 401(k) Savings Plan:
In our opinion, the accompanying statements of net assets available for benefits
and the related statements of changes in net assets available for benefits
present fairly, in all material respects, the net assets available for benefits
of the Foamex L.P. 401(k) Savings Plan (the "Plan") at December 31, 1999 and
1998, and the changes in net assets available for benefits for the years then
ended, in conformity with accounting principles generally accepted in the United
States. These financial statements 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 of these statements in
accordance with auditing standards generally accepted in the United States,
which require that we plan and perform the audit 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, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of Assets Held
for Investment Purposes is presented for the purpose of additional analysis and
is not a required part of the basic financial statements but is 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. This supplemental schedule is the responsibility of the Plan's management.
The supplemental schedule has been subjected to the auditing procedures applied
in the audits of the basic financial statements and, in our opinion, is fairly
stated in all material respects in relation to the basic financial statements
taken as a whole.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
May 26, 2000
Page 6 of 15 Pages
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FOAMEX L.P. 401(k) SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
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<S> <C> <C>
Assets:
Investments, at fair value $69,280,889 $63,881,827
Participant loans receivable 3,194,918 2,814,327
Employer contributions
receivable 305,747 308,195
Participant contributions
receivable 576,475 616,609
Other net receivables - 17,571
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Total assets 73,358,029 67,638,529
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Liabilities:
Administrative expenses payable 109,198 113,404
Other net payable - 937
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Total liabilities 109,198 114,341
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Net assets available for benefits $73,248,831 $67,524,188
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</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 7 of 15 Pages
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FOAMEX L.P. 401(k) SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
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<S> <C> <C>
ADDITIONS
Additions in net assets attributed to:
Interest and dividends $ 4,629,694 $ 3,267,560
Net appreciation/(depreciation)
in fair value of investments 4,387,267 (63,887)
Participant contributions 5,891,529 5,655,926
Employer contributions 1,082,458 855,415
Rollover contributions 98,274 82,468
Transfers in from related plan - 13,269,046
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Total additions 16,089,222 23,066,528
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DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants 9,646,577 6,125,959
Administrative expenses 542,168 379,507
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Total deductions 10,188,745 6,505,466
Transfer out to another plan 175,834 -
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Net increase (decrease) 5,724,643 16,561,062
Net assets available for benefits,
beginning of year 67,524,188 50,963,126
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Net assets available for benefits,
end of year $73,248,831 $67,524,188
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</TABLE>
The accompanying notes are an integral part of the financial statements.
Page 8 of 15 Pages
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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.
In 1998, the Additional Contribution was non-participant directed because
it was required to remain in the Foamex International Stock Fund until the
participant withdrew from the Plan. The balance in 1998 of non-participant
directed investments was $513,000. As of December 1, 1999, an amendment was made
to the Plan which ended any restrictions on or exclusivity to the Additional
Contribution to remain solely invested in the Foamex International Stock Fund;
therefore, there were no non-participant directed investments that existed at
the end of 1999.
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 $1,100
during 1999 and approximately $2,000 during 1998.
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. An election to defer the distribution until a
later date (but no later than age 70 1/2 unless the participant remains an
active employee) 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. 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 intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants would become 100 percent vested in their employer
contributions.
Page 9 of 15 Pages
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FOAMEX L.P. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. DESCRIPTION OF THE PLAN (continued)
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:
INSTITUTIONAL INVESTORS' STABLE ASSET FUND - A fund that seeks to provide
investors with a consistent rate of return while preserving capital and avoiding
market risk. It is a tax exempt collective investment fund that includes
investments in investment contracts issued by insurance companies, banks, and
other financial institutions, as well as cash and cash equivalents.
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.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
Page 10 of 15 Pages
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FOAMEX L.P. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
INVESTMENT VALUATION AND INCOME RECOGNITION - At December 31, 1999, 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 stated at 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.
ADMINISTRATIVE EXPENSES - Administrative expenses, which includes
recordkeeping, trustee, legal, and audit fees, were paid by the Plan for 1999
and 1998.
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. INVESTMENTS
The Plan's investments at December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
Institutional Investors' Stable Asset Fund $15,437,054 $15,979,112
Fidelity Puritan Fund 5,628,263 6,704,770
Vanguard Windsor Fund 16,970,875 19,160,385
Neuberger & Berman Guardian Fund 7,168,726 7,287,271
Janus Worldwide Fund 12,992,137 7,375,557
Foamex International Stock Fund 6,497,552 4,422,625
Vanguard Index 500 Fund 4,586,282 2,952,107
Participant Loans 3,194,918 2,814,327
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Total $72,475,807 $66,696,154
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</TABLE>
During 1999 and 1998, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) changed in value
as follows:
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
Mutual Funds $ 4,313,934 $(1,211,620)
Collective Funds 904,317 731,468
Common Stock (830,984) 416,265
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$ 4,387,267 $ (63,887)
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</TABLE>
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5000:
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
Net assets available for benefits per the financial statements $73,248,831 $67,524,188
Amounts allocated to withdrawing participants (252,232) -
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Net assets available for benefits per the Form 5500 $72,996,599 $67,524,188
=========== ===========
</TABLE>
Page 11 of 15 Pages
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FOAMEX L.P. 401(k) SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
4. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 (continued)
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
Benefits paid to participants per the financial statements $ 9,646,577 $ 6,125,959
Add: Amounts allocated to withdrawing participants - current year 252,232 -
Less: Amounts allocated to withdrawing participants - prior year - -
----------- -----------
Benefits paid to participants per the Form 5500 $ 9,898,809 $ 6,125,959
=========== ===========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
5. 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 1) 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 12 of 15 Pages
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SUPPLEMENTAL SCHEDULE
Page 13 of 15 Pages
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SCHEDULE H, PART IV, ITEM 4i
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<CAPTION>
FOAMEX L.P. 401(k) SAVINGS PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
as of December 31, 1999
<S> <C> <C>
Party-in Fair
Interest Description of Investment Cost Value
-------- ------------------------- --------------- ---------------
N/A Institutional Investors' Stable Asset Fund $13,960,656 $15,437,054
N/A Fidelity Puritan Fund 5,556,991 5,628,263
N/A Vanguard Windsor Fund 17,806,158 16,970,875
N/A Neuberger & Berman Guardian Fund 8,798,873 7,168,726
N/A Janus Worldwide Fund 7,738,944 12,992,137
* Foamex International Stock Fund 6,841,785 6,497,552
N/A Vanguard Index 500 Fund 3,883,475 4,586,282
N/A Participant loans, maturing through 2014 at an annual
interest rate of prime plus 2% or prime plus 1%. During
1999, interest rates ranged from 8.75% to 9.25% - 3,194,917
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Total investments $64,586,882 $72,475,807
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</TABLE>
* Party-in interest investment
Page 14 of 15 Pages
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