<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
_________________________
Form 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 1999
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _________________
Commission file number 1-13421
DAN RIVER INC.
(Exact name of registrant as specified in its charter)
GEORGIA 58-1854637
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2291 Memorial Drive 24541
Danville, Virginia (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (804) 799-7000
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
Number of shares of common stock outstanding as of April 3, 1999:
Class A: 21,300,750 Shares
Class B: 2,062,070 Shares
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<PAGE> 2
Forward Looking Statements.
- --------------------------
This Quarterly Report contains forward-looking statements within the meaning
of the Securities Act of 1933 and the Securities and Exchange Act of 1934.
These statements are subject to certain risks and uncertainties that could
cause actual results to differ materially from those included in such forward
looking statements. The words "believes," "expects," "intends," "estimates"
or "anticipates" and similar expressions, as well as future or conditional
verbs such as "will," "should," "would," and "could", are intended to
identify forward-looking statements. Specific forward looking statements
contained in this Quarterly Report include, among others, statements
regarding adequacy of the Company's liquidity and capital resources, the
anticipated impact and cost of remediating Year 2000 problems and anticipated
outcome of pending litigation. These forward looking statements are found in
Part I, Item 2, and in Part II, Item 1. There can be no assurance that the
assumptions made by management are correct.
The forward looking statements in this Quarterly Report are also subject to
certain risks and uncertainties including, among others, that the Company's
performance in future periods may be adversely impacted by the cyclical
nature of the textile industry, intense competition within the textile
industry, fluctuations in the price and availability of cotton and other raw
materials, the inability of the Company to make capital improvements
necessary to maintain competitiveness, possible adverse changes in
governmental regulation regarding the import of cotton and textile products,
difficulties in integrating acquired businesses and achieving cost savings,
changes in environmental regulations, deterioration of relationships with or
the loss of material customers and adverse changes in general market and
industry conditions.
Management believes that the forward looking statements in this Quarterly
Report are reasonable; however, such statements are based on current
expectations and undue reliance should not be placed on such statements. The
Company undertakes no obligation to update publicly any forward-looking
statements.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
See Following Pages.
<PAGE>
<PAGE> 3
DAN RIVER INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
April 3, January 2,
1999 1999
------------ ------------
<S> <C> <C>
(in thousands, except share
and per share data)
ASSETS
Current assets:
Cash and cash equivalents $ 2,486 $ 3,356
Accounts receivable, net 93,166 94,374
Inventories 165,684 175,045
Prepaid expenses and other current assets 10,308 11,283
Deferred income taxes 20,411 20,653
------------ -----------
Total current assets 292,055 304,711
Property, plant and equipment 446,266 437,771
Less accumulated depreciation and amortization (151,240) (141,131)
------------ -----------
Net property, plant and equipment 295,026 296,640
Goodwill, net 110,019 110,727
Other assets 8,144 8,132
------------ -----------
$ 705,244 $ 720,210
============ ===========
/TABLE
<PAGE>
<PAGE> 4
DAN RIVER INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
April 3, January 2,
1999 1999
------------ ------------
<S> <C> <C>
(in thousands, except share
and per share data)
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 2,837 $ 2,329
Accounts payable 30,609 33,825
Accrued compensation and related benefits 28,664 27,219
Other accrued expenses 20,630 19,484
------------ ------------
Total current liabilities 82,740 82,857
Other liabilities:
Long-term debt 334,732 351,939
Deferred income taxes 15,393 15,126
Other liabilities 10,110 11,514
Shareholders' equity:
Preferred stock, $.01 par value; authorized
50,000 shares; no shares issued -- --
Common stock, Class A, $.01 par value;
authorized 175,000,000 shares; issued
and outstanding 21,300,831 shares
(21,157,198 shares at January 2, 1999) 213 212
Common stock, Class B, $.01 par value;
authorized 35,000,000 shares; issued
and outstanding 2,062,070 shares 21 21
Common stock, Class C, $.01 par value;
authorized 5,000,000 shares; no shares
outstanding -- --
Additional paid-in capital 218,081 215,906
Retained earnings 43,954 42,635
------------ ------------
Total shareholders' equity 262,269 258,774
------------ ------------
$ 705,244 $ 720,210
============ ============
</TABLE>
See accompanying notes.<PAGE>
<PAGE> 5
DAN RIVER INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
--------------------------
April 3, April 4,
1999 1998
--------- ---------
(in thousands, except per share data)
<S> <C> <C>
Net sales $ 169,536 $ 120,943
Costs and expenses:
Cost of sales 141,641 94,898
Selling, general and
administrative expenses 17,362 13,901
Amortization of goodwill 696 -
--------- ---------
Operating income 9,837 12,144
Other income 290 280
Interest expense (7,344) (3,820)
--------- ---------
Income before income taxes 2,783 8,604
Provision for income taxes 1,233 3,202
--------- ---------
Net income $ 1,550 $ 5,402
========= =========
Earnings per share:
Basic $ 0.07 $ 0.29
========= =========
Diluted $ 0.07 $ 0.28
========= =========
</TABLE>
See accompanying notes.
<PAGE>
<PAGE> 6
DAN RIVER INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
---------------------------
April 3, April 4,
1999 1998
------------ ------------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,550 $ 5,402
Adjustments to reconcile net income to
net cash provided by operating activities:
Noncash interest expense 188 316
Depreciation and amortization of
property, plant and equipment 10,200 7,557
Amortization of goodwill 696 -
Deferred income taxes 509 754
Writedown/disposal of assets 12 31
Changes in operating assets and liabilities
Accounts receivable 1,208 1,392
Inventories 9,361 (6,897)
Prepaid expenses and other assets (29) (1,378)
Accounts payable and accrued expenses 811 5,334
Other liabilities (1,404) 7
---------- ----------
Net cash provided by operating
activities 23,102 12,518
---------- ----------
Cash flows from investing activities:
Capital expenditures (9,728) (8,379)
Proceeds from sale of assets 661 705
---------- ----------
Net cash used by investing activities (9,067) (7,674)
---------- ----------
Cash flows from financing activities:
Payments of long-term debt (541) (485)
Net payments - working capital facility (16,000) (4,000)
Proceeds from exercise of stock options 1,636 -
---------- ----------
Net cash used by financing
activities (14,905) (4,485)
---------- ----------
Net increase (decrease) in cash and cash
equivalents (870) 359
Cash and cash equivalents at beginning of period 3,356 1,759
---------- ----------
Cash and cash equivalents at end of period $ 2,486 $ 2,118
========== ==========
</TABLE>
See accompanying notes.<PAGE>
<PAGE> 7
DAN RIVER INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements
include the accounts of Dan River Inc. and its wholly-owned
subsidiaries, (collectively, the "Company"). In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation of results for the interim
periods presented have been included. Interim results are not
necessarily indicative of results for a full year. For further
information, refer to the consolidated financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the
year ended January 2, 1999.
2. Inventories
The components of inventory are as follows:
<TABLE>
<CAPTION>
April 3, January 2,
1999 1999
------------ ------------
(in thousands)
<S> <C> <C>
Finished goods $ 59,741 $ 60,914
Work in process 90,036 96,534
Raw materials 2,993 4,007
Supplies 12,914 13,590
-------- --------
Total Inventories $165,684 $175,045
======== ========
</TABLE>
<PAGE>
<PAGE> 8
3. Shareholders' Equity
Activity in Shareholders' Equity is as follows:
<TABLE>
<CAPTION>
Total
Additional Share-
Common Stock Paid-In Retained holders'
Class A Class B Capital Earnings Equity
------- -------- ---------- -------- ----------
(in thousands)
<S> <C> <C> <C> <C> <C>
Balance at Janu-
ary 2, 1999 $ 212 $ 21 $215,906 $42,635 $258,774
Net income -- -- -- 1,550 1,550
Exercise of stock
options 1 -- 1,635 -- 1,636
Tax effect of stock
options exercised -- -- 540 -- 540
Retirement of
Common Stock -- -- -- (231) (231)
------ ------ -------- ------- --------
Balance at April
3, 1999 $ 213 $ 21 $218,081 $43,954 $262,269
======= ====== ======== ======= ========
</TABLE>
<PAGE>
<PAGE> 9
4. Earnings Per Share
The following table sets forth the computation of basic and diluted
earnings per share:
<TABLE>
<CAPTION>
Three Months Ended
---------------------------
April 3, April 4,
1999 1998
------------ ------------
<S> <C> <C>
Numerator for basic and diluted earnings
per share -- net income $ 1,550,000 $ 5,402,000
=========== ===========
Denominator:
Denominator for basic earnings per share--
weighted-average shares 23,355,214 18,837,866
Effect of dilutive securities:
Employee stock options 168,379 236,184
----------- -----------
Denominator for diluted earnings per share--
weighted average shares adjusted for
dilutive securities 23,523,593 19,074,050
=========== ===========
Basic earnings per share $ 0.07 $ 0.29
=========== ===========
Diluted earnings per share $ 0.07 $ 0.28
=========== ===========
</TABLE>
<PAGE>
<PAGE> 10
5. Segment Information
Summarized information by reportable segment is shown in the following
tables:
<TABLE>
<CAPTION>
Three Months Ended
---------------------------
April 3, April 4,
1999 1998
------------ ------------
(in thousands)
<S> <C> <C>
Net sales:
Home Fashions $ 117,390 $ 69,588
Apparel Fabrics 40,228 51,355
Engineered Products 11,918 --
___________ ___________
Consolidated net sales $ 169,536 $ 120,943
============ ===========
Operating income (loss):
Home Fashions 11,764 6,197
Apparel Fabrics (127) 7,446
Engineered Products 537 --
Corporate items not allocated to segments:
Amortization of goodwill (696) --
Depreciation (1,409) (1,370)
Other (232) (129)
___________ ___________
Consolidated operating income $ 9,837 $ 12,144
=========== ===========
</TABLE>
6. Recent Accounting Pronouncements
Effective January 3, 1999, the Company prospectively adopted Statement
of Position ("SOP") No. 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." SOP No. 98-1 requires
that certain costs incurred in connection with developing or obtaining
software for internal use be capitalized and amortized over the
estimated useful life of the software. The effect of adopting the SOP
was to increase net income for the quarter ended April 3, 1999 by
$181,000.
<PAGE>
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
NET SALES
Net sales for the first quarter of 1999 were $169.5 million, an increase of
$48.6 million or 40.2% from net sales of $120.9 million for the first quarter
of 1998.
Home Fashions
Net sales of Home Fashions products for the first quarter of fiscal 1999 were
$117.4 million, up $47.8 million or 68.7% from the first quarter of fiscal
1998. The acquisition of The Bibb Company ("Bibb") in October 1998 contri-
buted $38.9 million of this increase. The remainder of the increase, ($8.9
million) was primarily attributable to increased sales of bed ensembles,
which were up $8.6 million for the quarter.
Apparel Fabrics
Net sales of Apparel Fabrics for the first quarter of fiscal 1999 were $40.2
million, down $11.1 million or 21.7% from the first quarter of fiscal 1998.
The sales decrease reflected lower sales in all product categories, including
the segment's largest category, shirting products, in which sales declined
$7.6 million or 23.0% from the first quarter of fiscal 1998.
Engineered Products
Net sales of Engineered Products for the first quarter of fiscal 1999 were
$11.9 million. The Engineered Products segment was acquired as part of the
acquisition of Bibb in October 1998.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, General and Administrative Expenses for the first quarter of fiscal
1999 were $17.4 million (10.2% of net sales), an increase of $3.5 million or
24.9% from $13.9 million (11.5% of net sales) for the first quarter of fiscal
1998. Virtually all ($3.4 million) of the increase was due to incremental
expenses resulting from the acquisition of Bibb.
OPERATING INCOME
Total operating income for the first quarter of fiscal 1999 was $9.8 million
(5.8% of net sales) compared to $12.1 million (10.0% of net sales) for the
first quarter of fiscal 1998.
Home Fashions
Operating income for the Home Fashions segment was $11.8 million for the
first quarter of fiscal 1999. This compares to operating income of $6.2
million for the first quarter of fiscal 1998. The acquisition of Bibb added
$3.9 million of operating income. Excluding Bibb, operating income increased
<PAGE>
<PAGE> 12
$1.6 million, primarily due to lower raw material prices during the quarter.
Absent the lower raw material costs, operating income would have been flat,
reflecting higher volumes offset by lower average pricing due to a
competitive pricing environment.
Apparel Fabrics
The Apparel Fabrics segment had an operating loss of $127,000 for the first
quarter of fiscal 1999. This compares to operating income of $7.4 million
for the first quarter of fiscal 1998. The reduction in operating income
reflects lower sales volume, a very competitive pricing environment, and
higher manufacturing costs resulting from reduced capacity utilization and
the associated under-absorption of fixed costs. This was offset somewhat by
favorable raw material costs.
Engineered Products
The Engineered Products segment generated $0.5 million in operating income
for the first quarter of fiscal 1999.
Corporate Items (not allocated to segments)
Amortization of goodwill was $0.7 million for the first quarter of fiscal
1999 and was entirely attributable to goodwill from the acquisition of Bibb.
Other expenses totaled $1.6 million in the first quarter of fiscal 1999
compared to $1.5 million in the first quarter of fiscal 1998. These expenses
consisted primarily of depreciation on the write-up of the Company's fixed
assets from when it was acquired in 1989.
INTEREST EXPENSE
Interest expense for the first quarter of fiscal 1999 was $7.3 million, up
$3.5 million or 92.2% from the first quarter of fiscal 1998. The increase in
interest expense was due to higher debt levels as a result of the acquisition
of Bibb, offset somewhat by lower average interest rates.
INCOME TAX PROVISION
The income tax provision was $1.2 million in the first quarter of fiscal 1999
(44.3% of pre-tax income) compared to $3.2 million (37.2% of pre-tax income)
in the first quarter of fiscal 1998. The higher effective tax rate in the
first quarter of fiscal 1999 was caused by non-deductible goodwill
amortization. Both the first quarter of fiscal 1999 and the first quarter of
fiscal 1998 reflect small tax-free gains on insurance claims reflected under
other income.
NET INCOME AND EARNINGS PER SHARE
Net income for the first quarter of fiscal 1999 was $1.6 million or $0.07 per
share (diluted) in comparison with $0.28 per share (diluted) for the first
quarter of fiscal 1998. Weighted average shares outstanding increased from
19.1 million for the first quarter of fiscal 1998 to 23.5 million for the
first quarter of fiscal 1999 as a result of shares issued in connection with
the acquisition of Bibb.
<PAGE>
<PAGE> 13
LIQUIDITY AND CAPITAL RESOURCES
General
The Company believes that internally generated cash flow, supplemented by
borrowings under its working capital line of credit, will be sufficient to
meet its foreseeable debt service requirements, capital expenditures, and
working capital needs. The Company had a debt to total capital ratio of
56.3% at April 3, 1999.
Credit Facilities and Vendor Financing
The Company maintains a $150 million secured working capital line of credit.
The working capital line of credit is secured by the Company's accounts
receivable and inventories. As of April 3, 1999, $76.9 million was used and
$73.1 million was unused and available for borrowing.
The working capital line of credit bears interest at the Base Rate plus
applicable percentage, as defined (7.88% as of May 4, 1999) or LIBOR plus
applicable percentage (6.38% as of May 4, 1999), for periods of one, two,
three or six months, at the Company's option. The working capital line is
non-amortizing and any amounts outstanding are due at the final maturity of
September 30, 2003.
The working capital line of credit is provided pursuant to a loan agreement
which contains certain covenants, including the maintenance of a certain
interest coverage ratio and maximum debt levels, and limitations on mergers
and consolidations, affiliated transactions, incurring liens, disposing of
assets and limitations on investments. An event of default under the loan
agreement includes Change of Control (as defined) as well as non-compliance
with certain other provisions.
Working Capital
Net cash generated from operating activities was $23.1 million in the three
months ended April 3, 1999. Included in that amount is a source of cash from
operating assets and liabilities of $9.9 million, comprised of a $11.4
million source from operating working capital (accounts receivable - $1.2
million source, inventories - $9.4 million source, and accounts payable and
accrued expenses - $0.8 million source) and a $1.4 million use of cash for
other liabilities.
During the comparable three month period ended April 4, 1998, net cash
generated from operating activities was $12.5 million. Included in that
amount is a use of cash for operating assets and liabilities of $1.5 million,
primarily comprised of a $0.2 million use for operating working capital
(accounts receivable - $1.4 million source, inventories - $6.9 million use,
and accounts payable and accrued expenses - $5.3 million source) and a $1.4
million use of cash for prepaid expenses and other assets.
Capital Improvements
During the first three months of fiscal 1999, the Company purchased $9.7
million in equipment and manufacturing improvements.
<PAGE>
<PAGE> 14
IMPACT OF YEAR 2000
Much attention has been given to a serious problem that exists in many
computer programs in use today, a problem that arose from the earliest days
of computing when systems had very limited memory storage capacities. To
save space and data entry time, only the last two digits of a year were used
when performing date calculations and, consequently, these systems may not be
able to properly recognize dates beginning with the Year 2000. The failure
of a computer system to accurately recognize the Year 2000 could result in
system failures or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Like most owners of computer software, the Company is replacing or modifying
a significant portion of its computer software to handle the Year 2000
problem. This includes business applications and embedded systems such as
manufacturing equipment, voice and data communications and Enterprise
Resource Planning ("ERP") systems. Through fiscal 1998, the Company had
spent approximately $7.0 million, and expects to spend approximately $10
million in fiscal 1999, in connection with modifying its computer information
systems to ensure the proper processing of transactions relating to Year 2000
and beyond. Most of these amounts are expenditures to implement certain new
or improved systems which not only achieve Year 2000 compliance, but
significantly improve and expand operational capabilities of certain of the
Company's computer systems and, therefore, are being capitalized. Costs
associated strictly with the Company's Year 2000 remediation program
(excluding costs relating to capital improvements to systems that are not
directly related to remediating Year 2000 problems in such systems) are being
expensed as incurred. All amounts are being funded with cash from operations
or borrowings under the Company's working capital line of credit. There can
be no assurance that the cost of the Company's Year 2000 program will not
materially exceed expectations.
Specifically, the Company has successfully implemented SAP R.3 for corporate
financial and material management systems which are Year 2000 compliant and
are operational. It is installing the SAP R.3 Enterprise Resource Planning
(ERP) System for its Home Fashions operations, which is expected to be
completed during the second quarter of fiscal 1999. Required modifications
of the Apparel Fabrics ERP system (Datatex) for Year 2000 compliance were
completed in December 1998 with integrated testing planned for the second
quarter of fiscal 1999. Also, Bibb's systems are being converted to the
Company's systems. The corporate systems of Bibb, i.e., financial, material
management, etc., were converted to SAP R.3 during the beginning of the
second quarter of fiscal 1999, and the Home Fashions and Engineered Products
businesses are expected to be converted to SAP R.3 ERP by the end of the
third quarter of fiscal 1999.
The Company is dependent upon the successful efforts of its customers and
suppliers of goods, services and essential utilities to identify and
remediate their Year 2000 problems and could be affected by the failure of
one or more of these efforts. The Company has communicated with most of its
major suppliers and customers. Efforts include the collection and evaluation
of voluntary representations made or provided by those parties. Although the
Company will continue to take reasonable care to gather information about
external parties, such information is not always provided voluntarily, is not
otherwise available, or may not be reliable. While the Company obtains its
goods (including raw materials) and services from a number of suppliers and
<PAGE>
<PAGE> 15
sells its products to a large number of customers, if a sufficient number of
these suppliers or customers experience Year 2000 problems that prevent or
substantially impair their ability to continue to transact business with the
Company as they currently do, the Company would be required to find
alternative suppliers and/or customers for its products. Any delay or
inability in finding such alternatives could have a material adverse effect
on the Company's results of operations, financial condition and cash flow.
Based on analysis of its own systems and discussions with and surveys of its
key vendors and customers, management currently believes that Company
information systems affected by Year 2000 issues have been or will be timely
identified and that its implementation plans will render all material systems
Year 2000 compliant on a timely basis; however, should other entities upon
whose systems the Company relies fail to properly address Year 2000
compliance issues, or should key resources required to achieve the
initiatives described herein become unavailable or prove to be unreliable,
the Company's effectiveness in achieving Year 2000 compliance could be
delayed, which could have a material adverse effect on the Company's results
of operations, financial condition and cash flow. The Company has begun the
development of contingency plans and recovery procedures to deal with
potential problems ranging from inoperable systems to failure of a critical
utility or a supplier. The Company expects to finalize these contingency
plans and procedures by July 1999. To the extent the Company experiences
material Year 2000 problems and any such contingency plan is ineffective in
remedying such problems, such Year 2000 problems could have a material
adverse effect on the Company's results of operations, financial condition
and cash flow.
<PAGE>
<PAGE> 16
PART II - OTHER INFORMATION
Items 1. Legal Proceedings.
From time to time, the Company is a party to litigation arising in the
ordinary course of its business. Except as described below, the Company is
not currently a party to any litigation that management believes, if
determined adversely to the Company, would have a material adverse effect on
the Company.
Bibb is a plaintiff in a lawsuit (previously reported in the Company's Annual
Report on Form 10-K for its 1998 fiscal year) filed on June 5, 1998 in the
General Court of Justice, Superior Court Division, Halifax County, North
Carolina, styled WestPoint Stevens, Inc. ("WestPoint") and the Bibb Company
v. Panda-Rosemary Corporation and Panda Energy Corporation (collectively,
including Panda-Rosemary, L.P., "Panda"), in which Bibb and WestPoint seek,
among other things, a declaratory judgment as to the validity of an
assignment by Bibb to WestPoint of Bibb's rights under a cogeneration
agreement between Bibb and Panda in connection with the sale of Bibb's
Roanoke Rapids towel operations to WestPoint in 1997. Panda counterclaimed
seeking, among other things, damages against WestPoint and/or Bibb based on
various theories of alleged breach of contract, tort, conspiracy and unfair
competition, all based generally on the allegation that Bibb could not
delegate its obligations under the contract without Panda's prior consent and
that Panda is, therefore, entitled to terminate the contract and/or
renegotiate the price to be paid by WestPoint for steam under the contract.
In discovery Panda has alleged damages in excess of $40 million. On October
27, 1998, Panda-Rosemary, L.P. and Panda Energy Corporation sued WestPoint,
Bibb and Dan River (as alleged successor to Bibb), making essentially the
same allegations, in the County Court at Law No. Two, Dallas County, Texas.
WestPoint is currently purchasing steam from the cogeneration facility and
Panda is accepting WestPoint's payments of the contract price for the steam.
The Company and WestPoint are cooperating fully in the defense of this
matter. The Company believes that Panda's position is without merit and
intends, in cooperation with WestPoint, to vigorously defend the lawsuit.
There can be no assurance, however, that the Company and WestPoint will
prevail or that the Company will not suffer a judgment against it in an
amount which would have a material adverse effect on its results of
operations or financial condition. The Company's insurance carrier has taken
the position that no coverage is available with respect to this matter.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
The Exhibits listed as applicable on the accompanying Exhibit
Index are filed as part of this Quarterly Report.
(b) Reports on Form 8-K. None.
<PAGE>
<PAGE> 17
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.
DAN RIVER INC.
<TABLE>
<S> <C>
Date: May 13, 1999 /s/ Barry F. Shea
-----------------------------------
Barry F. Shea
Executive Vice President-Chief
Financial Officer
(Authorized Signing Officer and
Principal Financial Officer)
</TABLE>
<PAGE>
<PAGE> 18
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit Page
- ----------- ---------------------- ----
<S> <C> <C>
3.1 Amended and Restated Articles of
Incorporation of Dan River Inc.
(incorporated by reference to
Exhibit 3.1 in Amendment No. 1
to Registration Statement on
Form S-1 (File No. 333-36479))
3.2 Bylaws of Dan River Inc.
(incorporated by reference to
Exhibit 3.2 in Amendment No. 1
to Registration Statement on
Form S-1 (File No. 333-36479))
11 Statement regarding Computation of
Earnings per share (incorporated by
reference to Note 4 to the Unaudited
Condensed Consolidated Financial
Statements included in this
Quarterly Report on Form 10-Q)
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET OF DAN RIVER INC. AS OF APRIL 3, 1999
AND THE RELATED CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE THREE
MONTHS ENDED APRIL 3, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-01-2000
<PERIOD-END> APR-03-1999
<CASH> 2,486
<SECURITIES> 0
<RECEIVABLES> 93,166
<ALLOWANCES> 0
<INVENTORY> 165,684
<CURRENT-ASSETS> 292,055
<PP&E> 446,266
<DEPRECIATION> 151,240
<TOTAL-ASSETS> 705,244
<CURRENT-LIABILITIES> 82,740
<BONDS> 334,732
0
0
<COMMON> 234
<OTHER-SE> 262,035
<TOTAL-LIABILITY-AND-EQUITY> 705,244
<SALES> 169,536
<TOTAL-REVENUES> 169,536
<CGS> 141,641
<TOTAL-COSTS> 141,641
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,344
<INCOME-PRETAX> 2,783
<INCOME-TAX> 1,233
<INCOME-CONTINUING> 1,550
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,550
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
