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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
[Fee Required]
For the fiscal year ended July 1, 1995
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
[No Fee Required]
For the transition period from __________________ to _____________________
Commission File No. 0-8544
SPEIZMAN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C>
Delaware 56-0901212
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
508 West Fifth Street, Charlotte, North Carolina 28202
(Address of principal executives offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (704) 372-3751
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required 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 filing such requirements for the past 90 days.
Yes [(Check Mark)] No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment of this Form 10-K.
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of September 14, 1995, was $9,462,064, based on the last
sale price of $3.75 per share reported by the NASDAQ National Market System
on that date.
As of September 14, 1995, there were 3,208,599 shares of the
registrant's Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement for its Annual Meeting
of Stockholder to be held on November 16, 1995, are incorporated herein by
reference into Part III.
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PART I
Item 1. Business.
General
Speizman Industries, Inc. (the "Company") is the leading
distributor of new sock knitting machines in the United States. It
distributes technologically advanced sock knitting machines
manufactured by Lonati, S.r.l., Brescia, Italy ("Lonati"), which the
Company believes is the world's largest manufacturer of hosiery
knitting equipment. It also distributes Lonati sock and sheer hosiery
knitting machines in Canada. In addition, through sales
arrangements with other European textile machinery manufacturers, the
Company distributes other sock knitting machines, knitting machines
for underwear, sweaters, collars and trim, and other knitted fabrics
and other equipment related to the manufacture of socks and sheer
hosiery, principally in the United States and Canada. The Company
also sells dyeing and finishing equipment for the textile industry. The
Company sells textile machine parts and used textile equipment in the
United States and a number of foreign countries.
Prior to 1990, the Company also manufactured mechanical
single cylinder sock knitting machines. In 1990, the Company ceased
its manufacturing activities due to a decline in the profitability
of this line of business and in order to focus the Company's activities
on the distribution of single cylinder machines manufactured by Lonati.
All references herein are to the Company's 52-or-53 week
fiscal year ending on the Saturday closest to June 30. Fiscal 1995,
1994, 1992, and 1991, each contained 52 weeks and ended on July, 1,
1995, July 2, 1994, June 27, 1992 and June 29, 1991. Fiscal 1993
contained 53 weeks and ended on July 3, 1993. Unless the context
otherwise requires, the term the "Company" as used herein includes
Speizman Industries, Inc. and its subsidiaries.
The Company and Lonati entered into their present
agreement for the sale of Lonati machines in the United States in
January 1992 (the "Lonati Agreement"). The Company and Lonati also
entered into a similar agreement in January 1992 relating to the
Company's distribution of Lonati sock and sheer hosiery knitting
machines in Canada. The company has distributed Lonati double cylinder
machines in the United States continuously since 1982. The Company
began distributing Lonati single cylinder machines in 1989.
Pursuant to the Lonati Agreement, Lonati has appointed the
Company as Lonati's exclusive agent in the United States for the sale
of its range of single and double cylinder sock knitting machines as
of the date of the Lonati Agreement and related spare parts. Under
the Lonati Agreement, the Company also serves as the distributor of
such equipment in the United States. Although the Lonati Agreement
does not establish the Company as the exclusive distributor of Lonati
sock machines in the United States, the Company in fact has
exclusively distributed Lonati double cylinder sock machines
continuously since 1982 and Lonati single cylinder sock knitting
machines since 1989 when the Company began to phase out its
manufacturing activities. The Lonati Agreement extends to December
31, 1995 and continues from year to year thereafter, although it may
be terminated on 90 days written notice at any year end or without
notice in the event of a breach. The Company and Lonati also entered
into a similar agreement in January 1992 relating to the Company's
distribution of Lonati sock and sheer hosiery knitting machines in
Canada.
The Lonati Agreement contains certain covenants and
conditions relating to the Company's sale of Lonati machines,
including, among others, requirements that the Company, at its
own expense, promote the sale of Lonati machines and assist Lonati in
maintaining its competitive position, maintain an efficient sales
staff, provide for the proper installation and servicing of the
machines, maintain an adequate inventory of parts and pay for all
costs of advertising the machines. The Company is prohibited during
the term of the Lonati Agreement from distributing any machines or parts
that compete with Lonati machines and parts. The Company believes that
it is and will remain in compliance in all material respects with such
covenants. The cost to the Company of Lonati machines, as well as the
delivery schedule of these machines, are totally at the discretion of
Lonati. The Lonati Agreement allows Lonati to sell machines directly
to the sock manufacturer with any resulting commission paid to the
Company determined on a case by case basis.
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The Lonati single cylinder machines distributed by the
Company are for the knitting of athletic socks. The Lonati double
cylinder machines are for the knitting of dress and casual socks. The
Lonati machines are electronic and high-speed and have computerized
controls. Lonati single cylinder machines are capable of knitting
pouch heel and toe, reciprocated heel and toe and tube socks.
These and other features allow the rapid change of sock design,
style and size, result in increased production volume and efficiency
and simplify the servicing of the machines. The Company distributes
these sock knitting machines as well as Lonati sheer hosiery
knitting machines in Canada. In addition, the Company distributes the
knitting machines, described below, manufactured by Santoni,
S.r.l. Brescia, Italy ("Santoni"), one of Lonati's subsidiaries, in the
United States and Canada. Sales by the company in the United
States and Canada of machines manufactured by Lonati, S.r.l., generated
the following percentages of the Company's net revenues: 44.4%
in 1995, 65.6% in 1994 and 66.7% in 1993. In addition, sales of
Santoni machines in the United States and Canada generated 9.3%, 4.4%
and 5.4% of the Company's net revenues in fiscal 1995, 1994 and 1993,
respectively.
In addition to the Lonati machines, the Company distributes
new knitting and other machines and equipment under written agreements
and other arrangements with the manufacturers. The following table sets
forth certain information concerning certain of these additional
distribution arrangements:
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<CAPTION>
Manufacturer Machine Territory
<S> <C> <C>
Santoni, S.r.l., Circular knitting machines for United States and
Brescia, Italy underwear, men's socks and women's Canada
sheer hosiery and surgical support hose
Jumberca, S.A., Sweater knitting machines United States, Canada, the United
Badalona, Spain Kingdom and Ireland
Zamark, S.p.A.. Flat knitting machines for collars and United States, Canada, the United
Somma Lombardo, Italy trim and sweaters Kingdom and Ireland
Conti Complett, S.p.A., Sock toe closing machines and sock United States
Milan, Italy turning devices
Sperotto Rimar, S.p.A., Fabric processing and finishing United States
Malo, Italy machines
Corino Machine, S.r.l., Fabric handling equipment United States and Canada
Alba, Italy
Fimatex, Turning devices for sock machines United States
Scandicci, Italy
Orizio Paolo, S.p.A., Fabric knitting machines United States
Brescia, Italy
</TABLE>
Sales of machines manufactured by Zamark (an affiliate of Lonati)
and Conti Complett generated an aggregate of 5.3%, 4.4% and 0.6% of the
Company's net revenues in fiscal 1995, 1994 and 1993, respectively.
Sales of machines manufactured by Jumberca generated 9.8%, 9.8%
and 3.2% of the Company's net revenues in fiscal 1995, 1994 and 1993,
respectively. The Company entered into its present agreement
with Jumberca (the "Jumberca Agreement") for the distribution of
Jumberca sweater and fabric knitting machines in February 1994.
All of the Jumberca machines sold by the Company to date have been
sweater and fabric knitting machines. The Company did not meet the
minimum purchase requirements under the Jumberca Agreement with
regard to the sweater or fabric
2
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knitting machines in fiscal 1995 due to weakened demand for such
machines. In addition, although the percentage of the Company's net
revenues generated by sales of Jumberca machines in fiscal 1995 did
not change as compared to fiscal 1994, such sales did not contribute to
the Company's net income in fiscal 1995 due principally to the
Company's lowering its sales prices to customers to generate
orders. See Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Results of Operations."
The Company expects sales of Jumberca machines to decrease in fiscal
1996 as compared to fiscal 1995, and does not expect its gross profit
from the sales of such machines to increase. In fiscal 1995,
purchasers of the Jumberca machines from the Company increased their
demands for extended payment terms due principally to the significant
capital commitment required in connection with such purchases and the
Company was unwilling to assume the credit risk resulting from
such extended terms. As a result of the foregoing, at the Company's
request, in March 1995 the parties amended the Jumberca Agreement
to eliminate the minimum purchase requirements thereunder and to
allow for the termination of the agreement prior to its original
termination date in January 1997. In accordance with the terms of
the Jumberca Agreement as amended, the Company terminated the agreement
with regard to the fabric knitting machines in July 1995 and the
agreement will terminate with regard to the sweater knitting machines in
December 1995. Although the Company believes that the the weakened
demand for the machines and the termination of the Jumberca Agreement
will have an adverse effect on its net revenues in fiscal 1996, it
does not believe that it will have any such effect on its net income
for the year. See Item 7, "Management's Discussion and Analysis
of Financial Condition and Results of Operations-- Effects of Inflation
and Changing Prices."
There can be no assurance that the Company will not
encounter significant difficulties in any attempt to enforce any
provision of the Lonati Agreement or Jumberca Agreement (or any other
agreement with a foreign manufacturer), or any agreement that may
arise in connection with the placement and confirmation of orders for
the machines manufactured by Lonati or Jumberca (or any other foreign
manufacturer) or obtain an adequate remedy for a breach of any such
provision, due principally to the fact that Lonati or Jumberca (or any
other foreign manufacturer) is a foreign company.
Used Machines, Parts and Liquidations
The Company sells used machinery and parts to the textile industry.
The Company carries significant amounts of machinery and parts
inventories to meet customers requirements and to assure itself of
an adequate supply of used machinery. The Company acts as a liquidator
of textile mills and as a broker in the purchase and sale of such mills.
Marketing and Sales
The Company markets and sells knitting machines and related
equipment primarily by maintaining frequent contacts with customers and
understanding of its customers' individual business needs.
Salespersons will set up competitive trials in a customer's plant and
allow the customer to use the Company's machine in its own work
environment alongside competing machines for two weeks to three
months. The Company also offers customers the opportunity to send their
employees to the Company for training courses on the operation and
service of the machines and, depending on the number of machines
purchased and the number of employees to train, may offer such
training courses at the customer's facility. In addition, the Company
exhibits its equipment at trade shows and uses its private showroom to
demonstrate new machines. These marketing strategies are complemented
by the Company's commitment to service and continuing education.
At August 15, 1995, the Company employed approximately 13 salespersons
and 26 technical representatives. In addition to its sales staff, the
Company uses over 30 commission sales agents in a number of foreign
countries in connection with its sales of used machines.
The terms of new machine sales generally are individually
negotiated including both the purchase price, payment terms and delivery
schedule. The Company is usually required to purchase imported
machines with a letter of credit in favor of the manufacturer delivered
not less than 15 days prior to the machine's shipment to the customer's
plant. Generally, the letter of credit must be payable 60 days or
longer from the date of the on-board bill of lading and upon
presentation of the bill of lading. The period from shipment by the
manufacturer to installation in the customer's plant is generally 30-45
days.
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The Company encourages trade-ins of older equipment, which
reduces the customer's initial capital outlay. The Company believes
that its trade-in policy has increased sales of certain of the Company's
new equipment lines.
Substantially all of the machines sold by the Company are
drop-shipped from the foreign manufacturer by container or air freight
directly to the customer's plant using the Company's freight
forwarder to coordinate shipment. Title is taken at the European port,
and the Company insures the machines for 110% of cost.
Because a substantial portion of the Company's revenues are
derived from sales of machines and equipment imported from abroad,
these sales may be subject to import controls, duty and currency
fluctuations. The majority of the Company's purchases of Italian
machines for sale in the United States are denominated in Italian
lira. Generally, the Company has been able to adjust sales prices or
purchase lira hedging contracts to compensate for anticipated
dollar fluctuations. However, international currency fluctuations
that result in substantial price level changes could impede import sales
and substantially impact profits. The Company is not able to
assess the quantitative effect such international price level changes
could have upon the Company's operations. All of the Company's export
sales originating from the United States are made in U.S. dollars. All
of the sales of the Company's United Kingdom subsidiary are denominated
in pounds sterling.
The Company also markets used machines through its employees and
outside commission salespersons. The Company markets its used machines
in the United States and in a number of foreign countries. The Company
uses trade advertising extensively and at least once every two months
distributes lists throughout the industry of used machines that the
Company has for sale.
The Company exports certain new and used machines and parts for
sale in Canada and a number of other foreign countries. See Note 1 of
Notes to Consolidated Financial Statements for certain financial
information concerning the Company's foreign sales in fiscal 1995, 1994
and 1993.
Customers
The Company's customers consist primarily of the major sock
manufacturers in the United States. In fiscal 1995, the Company's two
largest customers, Renfro Corporation and Kayser-Roth Corporation,
accounted for 7.3% and 5.2%, respectively, of the Company's net
revenues. In fiscal 1994, the Company's two largest customers,
Fruit of the Loom, Inc., and Renfro Corporation, accounted for 13.8%
and 13.4% of the Company's net revenues. Generally, the customers
contributing the most to the Company's net revenues vary from year
to year. The Company believes that the loss of any principal customer
could have a material adverse effect on the Company.
Backlog
The Company's backlog of unfilled orders for new and used
machines was $4.1 million at July 1, 1995 as compared to $15.1 million
at July 2, 1994, and $24.5 million at July 3, 1993. Management
believes that all the company's unfilled orders at July 1, 1995 will
be filled by the end of fiscal 1996. The period of time required to
fill orders varies depending on the machine ordered. The decline in
backlog is attributed to weakened demand for sock and sweater machines.
Competition
The sock knitting machine industry is competitive. Lonati
single cylinder machines compete primarily with machines manufactured
by an Italian and a Czech company and Lonati double cylinder machines
compete primarily with machines manufactured by an Italian company
acquired in 1993 by Lonati but not represented by the Company.
Lonati machines compete, to a lesser extent, with machines
manufactured by a number of other foreign companies of varying sizes
and a small domestic company, and with companies selling used
machines. The principal competitive factors in the distribution of
sock knitting machines are technology, price, service, allowance of
trade-ins and delivery.
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The Company believes that its competitive advantages are the
technological advantages of the Lonati machines, the Company's
commitment to customer service and the Company's allowance of trade-ins
of used machines on new Lonati machines. The Company believes that it
is at a short term competitive disadvantage if a potential customer's
decision will be based primarily on price since, generally, the
purchase price of Lonati machines is higher than that of competing
machines.
In its sale of new equipment, in addition to Lonati machines,
the Company competes with a number of foreign and domestic manufacturers
and distributors of new and used machines. In its sale of such
other machines and equipment, certain of the company's competitors may
have substantially greater resources than the Company.
Domestic and foreign sales of used sock and sheer hosiery
knitting machines is fragmented and highly competitive. The Company
competes with a number of domestic and foreign companies that
sell used machines as well as domestic and foreign manufacturers that
have used machines as a result of trade-ins. In the United States, the
Company has one primary competitor in its sale of used sock knitting
machines. The principal competitive factors in the Company's domestic
and foreign sales of used machines are price and availability of
machines that are in demand. Although the Company is the exclusive
distributor of parts for a number of the machines it distributes, it
competes with firms that manufacture and distribute duplicates of such
parts. In addition, the Company competes with a number of distributors
and manufacturers in its other parts sales.
Regulatory Matters
The Company is subject to various federal, state and local
statutes and regulations relating to the protection of the environment
and safety in the work place. The failure by the Company to comply
with any of such statutes or regulations could result in significant
monetary penalties, the cessation of certain of its operations, or
both. Management believes that the Company's current operations are
in compliance with applicable environmental and work place safety
statutes and regulations in all material respects. The Company's
compliance with these statutes and regulations has not materially
affected its business; however, the Company cannot predict the future
effects of compliance with such statutes or regulations.
Employees
As of August 15, 1995, the Company had 78 full-time employees. The
Company's employees are not represented by a labor union, and the
Company has never suffered an interruption of business as a result
of a labor dispute. The Company considers its relations with its
employees to be good.
Item 2. Properties.
The Company's headquarters, in which its administrative offices,
machinery rebuilding facilities and a substantial portion of its
warehouse space are located, is in Charlotte, North Carolina in an
approximately 89,000 square foot building that is leased from a
partnership owned by Robert S. Speizman and his brother. The City of
Charlotte has designated this building an "historic landmark," and, as
a result, modifications to the building require prior approval of the
Charlotte-Mecklenburg Historic Landmark Commission. The term of the
lease extends to March 31, 1996 and the annual rent thereunder was
$168,400 from January 1, 1993 to March 31, 1995. Annual rent is
$311,500 from April 1995 through March 1996. The Company also leases
approximately 25,000 square feet of additional warehouse space for
approximately $68,800 per year under a lease agreement that expires
April 1996, approximately 20,000 square feet of additional warehouse
space under a lease that expires September 1996 for an annual rental of
$48,000, and approximately 10,000 square feet of additional warehouse
space on a month-to-month basis for $100 per month, all in Charlotte,
North Carolina. The Company leases approximately 5,000 square feet of
office and warehouse space in Hicksville, New York, for approximately
$30,000 per year, under a lease expiring June 1997. The Company leases
approximately 250 square feet of office space, in which the
headquarters of its Canadian subsidiary are located, in Montreal,
Canada, for approximately $315 per month. The Company leases
approximately 2,500 square feet of office and warehouse space in
Leicester, United Kingdom, for approximately $1,700 per month.
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The Company is considering plans to move its headquarters to a
different building in Charlotte, North Carolina in which its
administrative offices, machinery rebuilding facilities and all or
substantially all of its warehouse space can be located. The Company
anticipates that it will lease any such building.
Item 3. Legal Proceedings.
On August 21, 1989, Dorothy L. Boyd, Administratrix, instituted an
action against the Company in the United States District Court for the
Western District of Virginia, seeking $5,000,000.00 in damages
allegedly resulting from a wrongful death that involved machinery
manufactured and sold by the Company more than 20 years before the
death. On January 12, 1994, the District Court granted the Company's
Motion for Summary Judgment and entered a judgment for the Company.
The plaintiff appealed to the United States Court of Appeals for the
Fourth Circuit, which on December 12, 1994, affirmed the judgment of the
District Court. The time in which the plaintiff could either
petition the Fourth Circuit Court for a re-hearing or petition the
United States Supreme Court for a writ of certiorari, has expired.
Therefore, this case is completed with no finding of liability on the
part of the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the Company's security holders
during the fourth quarter of fiscal 1995.
Executive Officers of Registrant
The following table sets forth certain information regarding the
executive officers of the Company:
Name Age Positions with the Company
Robert S. Speizman 55 Chairman of the Board, President and Director
Josef Sklut 66 Vice President-Finance, Secretary, Treasurer
and Director
Robert S. Speizman has served as President of the Company
since November 1976. From 1969 to October 1976, Mr. Speizman served as
Executive Vice President of the Company. Mr. Speizman has been a
director of the Company'since 1967 and Chairman of the Board of
Directors since July 1987.
Josef Sklut has served as Vice President-Finance of the
Company'since 1978, as Secretary of the Company since 1977, as Treasurer
of the Company'since 1969 and as a director of the Company since 1977.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The Company's Common Stock was listed on October 6, 1993, on
the NASDAQ National Market System under the symbol "SPZN". Previously,
the Common Stock was listed on the NASDAQ Small-Cap Market System.
The following table sets forth for the periods indicated (i) before
October 6, 1993, the high and low bid prices per share of Common Stock
as reported by the NASDAQ Small-Cap Market System and (ii) after October
5, 1993, the high and low sales prices as reported by the NASDAQ
National Market System.
Fiscal 1994 High Low
First Quarter (ended October 2, 1993) $19.50 $10.00
Second Quarter (ended January 1, 1994) 14.25 12.00
Third Quarter (ended April 2, 1994) 17.50 11.25
Fourth Quarter (ended July 2, 1994) 13.50 7.25
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Fiscal 1995
First Quarter (ended October 1, 1994) 8.75 6.00
Second Quarter (ended December 31, 1994) 6.50 3.22
Third Quarter (ended April 1, 1995) 5.38 3.38
Fourth Quarter (ended July 1, 1995) 6.75 4.25
As of June 30, 1995, there were approximately 453 stockholders of
record of the Common Stock.
The Company has never declared or paid any dividends on its Common
Stock. On November 29, 1993, the Company purchased all of the 8,147
outstanding shares of its 5% noncumulative nonvoting preferred
stock, par value $100 per share (the "5% Preferred Stock"), for
$100.00 per share. Under the terms of the 5% Preferred Stock, the
Company was obligated to pay a cash dividend of $5.00 per share in
connection with this purchase. Consequently, on November 29, 1993, a
dividend of $40,735 was paid to the former holders of the 5% Preferred
Stock.
Future cash dividends, if any, will be at the discretion of the
Company's Board of Directors and will depend upon, among other things,
future earnings, operations, capital requirements, surplus,
restrictive covenants in agreements to which the Company may be
subject, general business conditions and such other factors as the
Board of Directors may deem relevant. The Company's present credit
facility contains certain financial and other covenants that could limit
the Company's ability to pay cash dividends on its capital stock.
Item 6. Selected Consolidated Financial Data.
<TABLE>
<CAPTION>
Fiscal Year Ended
July 1, July 2, July 3, June 27, June 29,
1995 1994 1993 1992 1991
(In thousands, except net income per share data)
<S> <C> <C> <C> <C> <C>
Statement of Income Data:
Net revenues $61,597 $69,526 $39,552 $26,564 $20,107
Cost of sales 53,986 60,004 32,635 22,997 16,829
Gross profit 7,611 9,522 6,917 3,567 3,278
Selling, general and administrative expenses 5,478 4,350 3,651 2,546 2,202
Operating income 2,133 5,172 3,266 1,021 1,076
Interest (income) expense, net (15) 6 186 196 300
Income before taxes on income 2,148 5,166 3,080 825 776
Taxes on income (1) 854 1,869 661 82 64
Net income 1,294 3,297 2,419 743 712
Preferred stock dividends - 41 - - -
Net income applicable to common stock $ 1,294 $ 3,256 $ 2,419 $ 743 $ 712
Per Share Data:
Net income per share $ .40 $ 1.12 $ 1.03 $ .32 $ .33
Weighted average number of shares 3,271 2,905 2,360 2,297 2,185
Balance Sheet Data:
Working capital $17,613 $16,579 $ 4,553 $ 2,792 $ 2,772
Total assets 35,704 30,160 18,145 13,519 7,223
Short-term debt - - 175 401 248
Long-term debt, including current portion 147 293 1,060 1,374 1,845
Redeemable preferred stock - - - - 234
Stockholder's equity 18,782 17,483 5,137 2,714 1,836
</TABLE>
(1) Reflects the utilization of prior net operating losses to completely
offset federal income taxes in years 1991 and 1992 and to partially
offset federal income taxes in 1993.
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ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General
The Company's revenues are generated primarily from its
distribution of textile equipment, principally knitting machines and
dyeing and finishing equipment, to manufacturers of textile products
and, to a lesser extent, from the sale of parts used in such equipment
and the sale of used textile equipment.
Results of Operations
Year Ended July 1, 1995 Compared to Year Ended July 2, 1994
Net Revenues. Net Revenues in fiscal 1995 were $61.6 million as
compared to $69.5 million in fiscal 1994, a decrease of $7.9 million,
or 11.4%. This decrease reflects a $14.3 million decline in sales
of hosiery equipment, partially offset by increases of $3.4 million
in the sales of sweater machines and related equipment, $1.8 million
in the sales of dyeing and finishing equipment, and $1.2 million in
the sales of spare parts. The Company's backlog of unfilled orders for
new and used machines at July 1, 1995, was $4.1 million as compared
to $15.1 million at July 2, 1994. The decline in backlog is attributed
to weakened demand for sock and sweater machines.
Cost of Sales. In fiscal 1995, cost of sales was $54.0 million
as compared to $60.0 million for fiscal 1994, a decrease of $6.0
million, or 10.0%. Cost of sales as a percent of net revenues increased
to 87.6% in fiscal 1995 as compared to 86.3% in fiscal 1994.
Approximately 85% of this increase is attributable to increased
field service expenses associated with new machines. The remainder is
related to leveling of demand.
Selling Expenses. Selling expenses increased to $3.6 million in
fiscal 1995 from $2.4 million in fiscal 1994, an increase of 48.8%.
This increase resulted from the start-up of a foreign knitting
machine division, as well as increased selling activities, overall.
Major components of the increase were salespersons salaries and
commissions, advertising and exhibitions, travel, warehouse and office
space cost, letter of credit expense and insurance expense.
General and Administrative Expenses. General and
administrative expenses, at $1,895,000 in fiscal 1995, were down
slightly from $1,942,000 in fiscal 1994. The decrease reflects
declines in salaries and bonuses, partially offset by increases in
payroll and other taxes and in provisions for losses on accounts
receivable. As a percent of net revenues, general and administrative
expenses were 3.1% in 1995 as compared to 2.8% in fiscal 1994,
reflecting the 11.4% decrease in net revenues between the two fiscal
years.
Interest Expense. Interest expense is expressed net of
interest income. In fiscal 1995, interest income exceeded interest
expense by $15,000. Net interest expense was $6,000 in fiscal 1994.
Taxes on Income. The provision for taxes on income in fiscal
1995 was 39.8% of income before taxes. The provision for taxes on income
in fiscal 1994 was 36.2%.
Net Income. Net income applicable to common stock decreased
to $1.3 million in fiscal 1995 from $3.3 million in fiscal 1994. Net
income per share decreased to $0.40 as compared to $1.12 per
share in fiscal 1994 on a 12.6% increase in the equivalent number of
common shares outstanding.
Year Ended July 2, 1994 Compared to Year Ended July 3, 1993
Net Revenues. Net revenues in fiscal 1994 were $69.5 million as
compared to $39.6 million in fiscal 1993, an increase of $29.9 million,
or 75.8%. This increase reflects increases of $21.5 million in
sales of hosiery equipment, $7.1 million in sweater machines and
related equipment and $1.3 million from all other activities. The
Company's
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backlog of unfilled orders for new and used machines at July 2, 1994,
was $15.1 million as compared to $24.5 million at July 3, 1993.
Cost of Sales. In fiscal 1994, cost of sales was $60.0 million
as compared to $32.6 million for fiscal 1993, an increase of $27.4
million, or 83.9%. Cost of sales as a percentage of net revenues
increased to 86.3% from 82.5% in fiscal 1993. This increase in cost
of sales in fiscal 1994 reflected a narrowing of margins due to the
somewhat lower sales prices in response to a leveling of demand, as well
as increased competition for certain hosiery machines.
Selling Expenses. Selling expenses increased to $2.4 million in
fiscal 1994 from $2.0 million in fiscal 1993, an increase of 22.6%,
reflecting the Company's increased selling activities. The principal
components of this increase were salesperson's salaries and
commissions, advertising and exhibitions, travel, and warehouse and
office space cost. As a percentage of net revenues, selling expenses
declined to 3.5% in fiscal 1994 as compared to 5.0% in fiscal 1993.
General and Administrative Expenses. General and administrative
expenses were $1.9 million in fiscal 1994 as compared to $1.7 million
in fiscal 1993. Principal components of the $256,000 increases were
increases in salaries and bonuses, partially offset by declines in
life insurance expenses and in provisions for losses on accounts
receivable. As a percentage of net revenues, general and administrative
expenses decreased to 2.8% in fiscal 1994 as compared to 4.3% in fiscal
1993.
Interest Expense. Interest expense is expressed net of
interest income. Interest expense declined from $186,000 in fiscal
1993 to $6,000 in fiscal 1994. This decline reflects the elimination of
all debt to stockholders in fiscal 1994, reduced interest paid to
lending institutions, as well as an increase of $103,000 in interest
income in fiscal 1994.
Taxes on Income. The provision for taxes on income in fiscal
1994 was 36.2% of income before taxes as compared to 21.5% of such
income in fiscal 1993. The income tax provision in fiscal 1993 was
favorably affected by utilization of the Company's federal operating
loss carryforwards. Such carryforwards were fully utilized during
fiscal 1993.
Net Income. Net income applicable to common stock increased in
fiscal 1994 by $837,000 to $3.3 million from $2.4 million in fiscal
1993. That represents an increase of 34.6% in fiscal 1994 over fiscal
1993. Net income per share increased in fiscal 1994 to $1.12 as
compared to $1.03 per share in fiscal 1993, on a 23.1% increase in
the equivalent number of common shares outstanding.
Jumberca Agreement
Prior to its amendment in March 1995, the Jumberca
Agreement contained certain minimum purchase requirements for the
Jumberca sweater and fabric knitting machines. The Company did not
meet the minimum purchase requirements under the Jumberca Agreement
with regard to either type of machine in fiscal 1995 due principally
to weakened demand for such machines. Due, in part, to the weakened
demand, at the Company's request, in March 1995, the parties amended the
Jumberca Agreement to eliminate the minimum purchase requirements
thereunder and to allow for the termination of the agreement prior to
its original termination date in January 1997. In accordance with the
terms of the Jumberca Agreements, as amended in March 1995, the Company
terminated the agreement with regard to the Jumberca fabric knitting
machines in July 1995 and the agreement will terminate with regard to
the Jumberca sweater knitting machines in December 1995.
Although the Company believes that the weakened demand for the machines
and the termination of the Jumberca Agreement will have an adverse
effect on its net revenues in fiscal 1996, it does not believe that it
will have any such effect on its net income for the year. See Item 1,
"Business--General."
Liquidity and Capital Resources
The Company filed a registration statement on Form S-1
(Registration No. 33-69748), and amendments thereto, with the Securities
and Exchange Commission for the offering of 1,430,766 shares of the
Company's Common Stock
9
<PAGE>
of which 700,000 were offered by the Company and 730,766 were offered
by certain stockholders. This registration statement was declared
effective by the Securities and Exchange Commission on November 12,
1993. Subsequently, the 15% over-allotment provision was elected by the
underwriters. As a result, the offering was increased by 214,614
shares, of which 164,164 were offered by the Company and 50,000 shares
were offered by a stockholder. The Company used net proceeds of this
offering (approximately $9.3 million) to collateralize letters of
credit, repurchase preferred stock, repay indebtedness owed to the
Company's President and principal stockholder, finance inventories of
new and used machines and for general corporate purposes.
The Company's operations require a substantial line of
letters of credit to cover its customers' orders. The Company's credit
facility provides for an overall facility of $14.0 million for
letters of credit, including up to $2.0 million in revolving funds.
This facility expires October 31, 1996. Management believes that
this facility will be adequate to meet current financial requirements.
Working capital increased by $1.0 million to $17.6 million at
July 1, 1995 as compared to $16.6 million at July 2, 1994. Operating
activities required $2.4 million in fiscal 1995 as compared to $2.9
million required by such activities in fiscal 1994. This decrease
in funds required resulted essentially from a $6.3 million increase
in inventories and a $1.2 million increase in prepaid expenses, which
were largely funded by a $5.0 million increase in accounts payable. As
a result, cash and cash equivalents declined from $5.4 million at July
2, 1994, to $2.4 million at July 1, 1995.
Seasonality and Other Factors
There are certain seasonal factors that may affect the
Company's business. Traditionally, manufacturing businesses in Italy
close for the month of August, and the Company's customers close
for one week in July. Consequently, no shipments or deliveries, as
the case may be, of machines distributed by the Company that are
manufactured in Italy are made during these periods in the Company's
first quarter. In addition, manufacturing businesses in Italy
generally close for two weeks in December, during the Company's second
quarter. Fluctuations on customer orders or other factors may affect
quarterly variations in net revenues from year to year.
Effects of Inflation and Changing Prices
Management believes that inflation has not had a material effect
on the Company's operations.
A substantial portion of the Company's machine and spare
part purchases are denominated and payable in Italian lira. Currency
fluctuations of the lira could result in substantial price level
changes and therefore impede or promote import/export sales and
substantially impact profits. However, to reduce exposure to adverse
foreign currency fluctuations during the period from customer orders
to payment for goods sold, the Company enters into forward exchange
contracts. The Company is not able to assess the quantitative effect
that such currency fluctuations could have upon the Company's
operations. There can be no assurance that fluctuations in foreign
currency exchange rates will not have a significant adverse effect on
future operations.
In addition, the Jumberca Agreement denominates the purchase
prices for the Jumberca machines specified therein in Spanish pesetas.
Since February 1994 to date, the Company, in orders that it has
placed with Jumberca, has denominated the purchase price for the
machines ordered in U.S. dollars and Jumberca has accepted all such
orders. The Company intends to continue this practice (which
eliminates the risk of adverse fluctuations in the value of the
peseta as compared to the dollar during the period between the date a
machine is ordered and the payment date) through December 1995, the
termination date of the Jumberca Agreement, with regard to any Jumberca
machines that it purchases during this period.
Under the Jumberca Agreement, in the event that the value
of the peseta as compared to the U.S. dollar is below a specified level
at the time a machine is ordered, there is an automatic upward
adjustment of the specified purchase price. (Since February 1994, the
date of the Jumberca Agreement, to date, the value of the peseta as
compared to the
10
<PAGE>
dollar has not been below the level specified therein at any
time that the Company ordered a machine.) There is no similar
adjustment provision in the Jumberca Agreement in the event that the
value of the peseta as compared to the dollar increases. Also since
February 1994 to date, in a number of instances, the Company
has not paid Jumberca the purchase prices for the machines specified in
the Jumberca Agreement, but rather has negotiated the purchase price for
a particular machine at the time it places the order based on, among
other things, the then current value of the peseta and the dollar, the
number of machines ordered and competitive and other market conditions.
Item 8. Financial Statements and Supplementary Data.
The financial statements and supplementary data required by
this Item 8 appear on Pages F-1 through F-12 and S-1 through S-2 of this
Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The response to this Item 10 is set forth in part under the caption
"Executive Officers of the Registrant" in Part I of this Annual Report
on Form 10-K and the remainder is set forth in the Company's
Proxy Statement for the Annual Meeting of Shareholders to be held
November 16, 1995 (the "October 1995 Proxy Statement") under the
sections captioned "Election of Directors," "Certain Information
Regarding the Board of Directors" and "Compliance with Section 16(a) of
the Securities Exchange Act of 1934," which sections are incorporated
herein by reference.
Item 11. Executive Compensation.
The response to this Item 11 is set forth in the October
1995 Proxy Statement under the section captioned "Executive Compensation
and Related Information," which section, other than the subsections
captioned "Report of the Compensation Committee and the Stock Option
Committee on Executive Compensation" and "Comparative Performance
Graph," is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The response to this Item 12 is set forth in the October 1995 Proxy
Statement under the section captioned Stock Ownership of Certain
Beneficial Owners and Management, which section is incorporated by
reference.
Item 13. Certain Relationships and Related Transactions.
The response to this Item 13 is set forth in the October
1995 Proxy Statement under the section captioned "Certain Transactions,"
which section is incorporated herein by reference.
11
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a)
The following documents are included as part of the Annual Report on
Form 10-K:
1. Financial Statements:
<TABLE>
<CAPTION>
Page
<S> <C>
Report of Independent Certified Public Accountants F-1
Consolidated Balance Sheets - July 1, 1995 and July 2, 1994 F-2
Consolidated Financial Statements for each of the three years in the periods ended July 1,
1995, July 2, 1994 and July 3, 1993:
Consolidated Statements of Income F-3
Consolidated Statements of Stockholders Equity F-4
Consolidated Statements of Cash Flows F-5
Summary of Accounting Policies F-6
Notes to Consolidated Financial Statements F-7
2. Financial Statement Schedules:
Report of Independent Certified Public Accountants S-1
Schedule II - Valuation and Qualifying Accounts S-2
3. Exhibits:
</TABLE>
The Exhibits filed as part of this Annual Report on Form 10-K
are listed on the Exhibit Index immediately preceding such Exhibits, and
are incorporated herein by reference.
(b)
Reports on Form 8-K
The Company filed no Forms 8-K in any of the months included in
the fourth quarter of the Company's current fiscal year.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 131 or 15(d) 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.
SPEIZMAN INDUSTRIES, INC.
Date: September __, 1995
By:
Robert S. Speizman, President
Pursuant to the requirements of the Securities Act of 1933,
this has been signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
President and Director September 29, 1995
Robert S. Speizman (Principal Executive Officer)
Vice President-Finance, September 29, 1995
Josef Sklut Secretary, Treasurer and Director
(Principal Financial Officer
and Principal Accounting Officer)
Director September 29, 1995
Steven P. Berkowitz
Director September 29, 1995
William Gorelick
Director September 29, 1995
Scott Lea
13
<PAGE>
(BDO Seidman, LLP Letter Head Appears Here)
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
Speizman Industries, Inc.
We have audited the accompanying consolidated balance sheets of Speizman
Industries, Inc. and subsidiaries as of July 1, 1995 and July 2, 1994, and the
related consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended July 1, 1995. These
financial statements are the responsibility of the Company'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 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. 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position
of Speizman Industries, Inc. and subsidiaries at July 1, 1995 and July 2, 1994,
and the results of their operations and their cash flows for each of the
three years in the period ended July 1, 1995, in conformity with generally
accepted accounting principles.
(Signature of BDO Seidman, LLP)
Charlotte, North Carolina BDO Seidman, LLP
September 1, 1995
F-1
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
</TABLE>
<TABLE>
<CAPTION>
July 1, July 2,
1995 1994
<S> <C> <C>
ASSETS
Current:
Cash and cash equivalents $ 2,436,859 $ 5,433,664
Accounts receivable (Notes 2 and 6) 16,078,683 15,170,190
Inventories (Notes 3 and 6) 13,428,014 7,296,836
Prepaid expenses and other current assets 2,458,355 1,182,894
TOTAL CURRENT ASSETS 34,401,911 29,083,584
Property and Equipment : (Notes 4 and 7)
Leasehold improvements 543,874 542,361
Machinery and equipment 876,565 509,197
Furniture, fixtures and transportation equipment 834,187 877,498
2,254,626 1,929,056
Less accumulated depreciation and amortization (1,440,688) (1,409,050)
NET PROPERTY AND EQUIPMENT 813,938 520,006
Other 488,609 556,271
$35,704,458 $30,159,861
LIABILITIES AND STOCKHOLDERS EQUITY
Current:
Accounts payable $15,056,927 $10,041,865
Customers deposits 884,881 1,827,196
Accrued expenses 833,886 515,118
Current maturities of long-term debt (Note 7) 13,190 120,630
TOTAL CURRENT LIABILITIES 16,788,884 12,504,809
Long-Term Debt (Note 7) 133,629 172,153
TOTAL LIABILITIES 16,922,513 12,676,962
Commitments (Notes 4, 9, 11, 12 and 13)
Stockholders Equity (Notes 8, 9 and 10):
Common Stock - par value $.10; authorized 6,000,000 shares;
issued 3,236,199 and 3,234,949 shares 323,620 323,495
Additional paid-in capital 12,459,965 12,455,590
Retained earnings 6,097,426 4,803,611
Foreign currency translation adjustment
731 -
Total 18,881,742 17,582,696
Treasury stock, at cost, 27,600 common shares (99,797) (99,797)
TOTAL STOCKHOLDERS EQUITY 18,781,945 17,482,899
$35,704,458 $30,159,861
</TABLE>
See accompanying summary of accounting policies and notes to consolidated
financial statements.
F-2
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Year Ended
July 1, July 2, July 3,
1995 1994 1993
<S> <C> <C> <C>
NET REVENUES (Note 1) $61,596 ,833 $69,525,581 $39,552,021
COSTS AND EXPENSES:
Cost of sales 53,986,242 60,003,901 32,634,909
Selling expenses 3,582,719 2,407,086 1,964,246
General and administrative expenses 1,894,915 1,942,375 1,686,722
Total costs and expenses 59,463,876 64,353,362 36,285,877
2,132,957 5,172,219 3,266,144
INTEREST (INCOME) EXPENSE, net of interest income
of $101,562, $128,675 and $26,031 (14,858) 6,393 186,388
Income before taxes on income 2,147,815 5,165,826 3,079,756
TAXES ON INCOME (Note 5) 854,000 1,869,000 661,000
NET INCOME 1,293,815 3,296,826 2,418,756
Preferred stock dividends - 40,735 -
NET INCOME APPLICABLE TO COMMON STOCK $ 1,293,815 $ 3,256,091 $ 2,418,756
NET INCOME PER SHARE $ 0.40 $ 1.12 $ 1.03
Weighted average number of common and equivalent
shares 3,271,464 2,904,525 2,359,754
</TABLE>
See accompanying summary of accounting policies and notes to consolidated
financial statements.
F-3
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Foreign
Additional Retained Currency
Preferred Common Common Paid-In Earnings Translation Treasury Stockholder's
Stock Shares Stock Capital (Deficit) Adjustment Stock Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, JUNE 28, 1992 $894,152 1,994,699 $199,470 $ 2,591,171 $(871,236) $ - $(99,797) $2,713,760
Net income - - - - 2,418,756 - - 2,418,756
Exercise of stock options - 4,142 414 4,317 - - - 4,731
BALANCE, JULY 3, 1993 894,152 1,998,841 199,884 2,595,488 1,547,520 - (99,797) 5,137,247
Net income before preferred
stock dividend - - - - 3,296,826 - - 3,296,826
Preferred stock dividend - - - - (40,735) - - (40,735)
Redemption of preferred stock (894,152) - - - - - - (894,152)
Conversion of preferred stock
to common stock - 240,770 24,077 55,376 - - - 79,453
Net proceeds of common
stock offering - 864,609 86,461 9,163,885 - - - 9,250,346
Exercise of stock options - 130,729 13,073 174,841 - - - 187,914
Tax effect of exercise of
stock options - - - 466,000 - - - 466,000
BALANCE, JULY 2, 1994 - 3,234,949 323,495 12,455,590 4,803,611 - (99,797) 17,482,899
Net income - - - - 1,293,815 - - 1,293,815
Exercise of stock options - 1,250 125 4,375 - - - 4,500
Foreign currency translation
adjustment - - - - - 731 - 731
BALANCE, JULY 1, 1995 $ - 3,236,199 $323,620 $12,459,965 $6,097,426 $ 731 $(99,797) $18,781,945
</TABLE>
See accompanying summary of accounting policies and notes to consolidated
financial statements.
F-4
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year Ended
July 1, July 2, July 3,
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,293,815 $ 3,296,826 $ 2,418,756
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 166,965 193,133 219,293
Provision for losses on accounts receivable 171,477 17,850 83,840
Provision for inventory obsolescence 200,000 200,000 200,000
Provision for deferred income taxes (75,000) 109,000 (390,000)
Provision for deferred compensation (6) 28,788 70,000
Foreign currency translation adjustment 731 - -
(Increase) decrease in:
Accounts receivable (1,079,970) (4,322,948) (5,991,612)
Inventories (6,331,178) (2,741,376) 1,363,427
Prepaid Expenses (1,176,461) (554,615) 228,795
Other assets 43,662 (168,226) (56,682)
Increase (decrease) in:
Accounts payable 5,015,062 2,237,330 1,249,242
Accrued expenses and customers deposits (623,547) (1,159,937) 1,493,546
Net cash provided by (used in) operating activities (2,394,450) (2,864,175) 888,605
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (520,274) (102,723) (119,647)
Proceeds from property and equipment disposals 59,377 3,501 16,537
Net cash used in investing activities (460,897) (99,222) (103,110)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on notes payable - (174,785) (226,359)
Principal payments on long term debt (145,958) (734,800) (579,641)
Net proceeds of common stock offering - 9,250,346 -
Dividends on preferred stock - (40,735) -
Redemption of preferred stock - (814,699) -
Issuance of common stock upon exercise of stock options
4,500 187,914 4,731
Net cash provided by (used in) financing activities (141,458) 7,673,241 (801,269)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (2,996,805) 4,709,844 (15,774)
CASH AND CASH EQUIVALENTS, at beginning of year 5,433,664 723,820 739,594
CASH AND CASH EQUIVALENTS, at end of year $2,436,859 $ 5,433,664 $ 723,820
</TABLE>
See accompanying summary of accounting policies and notes to consolidated
financial statements.
F-5
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OF ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of
Speizman Industries, Inc. (the "Company") include
all of its subsidiaries, all of which are majority
owned. All material intercompany transactions (domestic
and foreign) have been eliminated. The financial
statements of the Company's United Kingdom subsidiary
are translated from pounds sterling to U.S. dollars in
accordance with generally accepted accounting
principles.
REVENUE RECOGNITION
The major portion of the Company's
revenues consists of sales and commissions on sales of
machinery and equipment. The profit derived
therefrom is recognized in full at the time of
shipment, except that commissions receivable over
more than one year are recognized at their
discounted present value. Total sales commissions
included in net revenues approximated $286,000,
$142,000 and $1,041,000 for the years ended July 1,
1995, July 2, 1994 and July 3, 1993, respectively.
CASH AND CASH EQUIVALENTS
For purposes of the statements of cash flows,
the Company considers all highly liquid debt
instruments with a maturity of three months or less to
be cash equivalents.
INVENTORIES
Inventories are carried at the lower of cost
or market. Cost is computed, in the case of machines,
on an identified cost basis and, in the case of other
inventories, on an average cost basis.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost.
Depreciation is computed over the estimated useful
lives of the assets by the straight-line method
for financial reporting purposes and by accelerated
methods for income tax purposes.
FOREIGN EXCHANGE CONTRACTS
The Company enters into foreign currency
contracts to reduce the foreign currency exchange
risks. Foreign currency hedging contracts obligate
the Company to buy a specified amount of foreign
currency at a fixed price in specific future periods.
Realized and unrealized gains and losses are recognized
in net income in the period of the underlying
transaction. As of July 1, 1995, the Company had
contracts maturing through December 1995 to purchase
approximately 27.3 billion Lira, approximately $16.7
million at the spot rate on that date.
TAXES ON INCOME
For the fiscal year ended 1993 the Company
followed the liability method of accounting for income
taxes in accordance with the Financial Accounting
Standards ("FAS") Board Statement No. 96. For fiscal
years ended 1995 and 1994, the Company adopted the
FAS Statement No. 109, "Accounting for Income Taxes",
which changes the liability approach to calculating
deferred income taxes set forth in Statement No. 96.
The impact of adopting the rules on the Company's
financial statements was not material.
INCOME PER SHARE
Income per share is computed on the
weighted average number of common and equivalent shares
outstanding during the period. Common equivalent
shares include those common shares which would be
issued upon the full conversion of the outstanding
convertible preferred stock and those common shares
issuable upon the exercise of the stock options, when
dilutive, net of shares assumed to have been
repurchased with the proceeds.
FISCAL YEAR
The Company maintains its accounting records
on a 52-53 week fiscal year. The fiscal year ends on
the Saturday closest to June 30. Years ending July 1,
1995 and July 2, 1994 included 52 weeks. The year
ended July 3, 1993 included 53 weeks.
RECLASSIFICATION
Certain 1993 amounts have been reclassified to
conform with 1995 presentation.
F-6
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- BUSINESS AND CREDIT RISK CONCENTRATION
The Company is engaged in the distribution
of machinery for the textile industry. With operations
in the United States, Canada and the United
Kingdom, the Company primarily sells to customers
located within the United States. Export sales from
the United States were approximately $8,547,000,
$5,439,000 and $4,039,000 during fiscal 1995, 1994
and 1993, respectively. There were no export sales by
the Canadian operations. Sales of the Company's United
Kingdom subsidiary amounted to approximately
$2,983,000, essentially all of which were to customers
in the United Kingdom.
Financial instruments which potentially subject
the Company to credit risk consist principally of
temporary cash investments and trade receivables. The
Company places its temporary cash investments with high
credit quality financial institutions and, by policy,
limits the amount of credit exposure to any one
financial institution.
The Company reviews a customer's credit history
before extending credit. An allowance for doubtful
accounts is established based upon factors
surrounding the credit risk of specific customers,
historical trends and other information. To reduce
credit risk the Company generally requires a down
payment on large equipment orders.
A substantial amount of the Company's
revenues are generated from the sale of sock knitting
and other machines manufactured by Lonati, S.r.l. and
one of its wholly owned subsidiaries. In 1995,
approximately 7% and 5% of revenues consisted of
sales to the Company's two largest customers. In
1994, approximately 14% and 13% of revenues consisted
of sales to the Company's two largest customers. In
1993, approximately 13% and 11% of revenues consisted
of sales to the Company's two largest customers.
Generally, the customers contributing the most to the
Company's net revenues vary from year to year.
NOTE 2 -- ACCOUNTS RECEIVABLE
Accounts receivable are summarized as follows:
July 1, 1995 July 2, 1994
Trade receivables $16,285,841 $15,239,891
Less allowance for doubtful accounts (207,158) (69,701)
Net accounts receivable $16,078,683 $15,170,190
NOTE 3 -- INVENTORIES
Inventories are summarized as follows:
July 1, 1995 July 2, 1994
Machines
New $ 4,786,811 $ 638,690
Used 5,319,489 3,579,346
Parts and supplies 3,321,714 3,078,800
Total $13,428,014 $7,296,836
NOTE 4 -- LEASES
The Company conducts its operations from
leased facilities which include both offices and
warehouses. Its primary operating facility is
leased from a partnership in which Mr. Robert S.
Speizman, the Company's president, has a 50%
interest. Lease payments to the partnership
approximated $204,000, $168,000, and $135,000 in
fiscal years 1995, 1994 and 1993, respectively.
The Company leases machinery and equipment,
furniture and fixtures and transportation equipment
under noncancelable capital lease agreements which
expire at various dates through 1998.
F-7
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Capitalized leases included in property and equipment are summarized as
follows:
July 1, 1995 July 2, 1994
Machinery and Equipment $ - $ 19,216
Furniture, fixtures and
transportation equipment 145,006 360,756
145,006 379,972
Less accumulated amortization (100,440) (190,329)
Net leased property $ 44,566 $ 189,643
As of July 1, 1995, future net minimum lease payments under capital
leases and future minimum rental payments required under operating
leases that have initial or remaining noncancelable terms in excess of
one year are as follows:
Capital Operating
Leases Leases
1996 $ 14,613 $436,942
1997 2,032 168,483
1998 2,181 65,474
1999 - 25,854
2000 - 17,139
Beyond - 19,745
Total minimum lease payments 18,826 $733,637
Less amount representing interest (2,789)
Present value of net minimum lease
payments $ 16,037
Total rent expense for operating leases approximated $515,800, $311,600,
and $176,300 for fiscal years 1995, 1994 and 1993, respectively.
NOTE 5 -- TAXES ON INCOME
Provisions for federal and state income taxes in the consolidated
statements of income are made up of the following components:
1995 1994 1993
Current:
Federal $747,000 $1,556,000 $ 818,000
State 182,000 204,000 233,000
929,000 1,760,000 1,051,000
Deferred:
Federal $ (54,000) $ 71,000 $ (310,000)
State (21,000) 38,000 (80,000)
(75,000) 109,000 (390,000)
Total taxes on income $ 854,000 $1,869,000 $ 661,000
Deferred tax benefits and liabilities are provided for the temporary
differences between the book and tax bases of assets and liabilities.
Deferred tax assets (liabilities) are reflected in the consolidated
balance sheets as follows:
July 1, 1995 July 2, 1994
Net current assets $395,000 $296,000
Net noncurrent assets (liability) (39,000) (15,000)
$356,000 $281,000
F-8
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Principal items making up the deferred income tax
(assets) liabilities are as follows:
<TABLE>
<CAPTION>
Year Ended
July 1, July 2,
1995 1994
<S> <C> <C>
Inventory valuation reserves $(225,000) $(230,000)
Depreciation 98,000 148,000
Deferred charges (54,000) (72,700)
Capitalized leases (5,000) (61,000)
Inventory capitalization (91,000) (39,000)
Accounts receivable reserves (78,000) (26,000)
Other (1,000) (300)
Net deferred tax asset $(356,000) $(281,000)
</TABLE>
The Company's effective income tax rates
were different than the U.S. Federal statutory tax rate
for the following reasons:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
U.S. Federal statutory tax rate . . . . . . . . . . . . . . . 34.0% 34.0% 34.0%
Net tax effect of prior year temporary difference for which no
deferred federal income tax benefits were recorded . . . - - (2.5)
State income taxes, net of Federal income tax benefit . . . . 3.5 3.7 3.7
Utilization of net operating loss carryforward . . . . . . . - - (8.7)
Utilization of tax credits . . . . . . . . . . . . . . . . . - - (5.5)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 (1.5) 0.5%
Effective tax rate . . . . . . . . . . . . . . . . . . . . . 39.8% 36.2% 21.5%
</TABLE>
Operating loss carryforwards utilized in
1993 reduced the Company's income tax liability by
approximately $267,000. In 1993, all remaining
operating loss carryforwards were utilized; thus, the
income tax liability for 1994 was not offset by
carryforwards or credits.
NOTE 6 -- NOTES PAYABLE
The Company has a credit facility with
NationsBank, expiring October 31, 1996. This facility
provides $14.0 million including up to a maximum of
$2.0 million for direct borrowings, with the balance
available for the issuance of documentary letters
of credit. Amounts outstanding under the line of credit
bear interest at the greater of prime plus 1% or the
Federal Funds Effective Rate plus 1.5% for base rate
loans and the 30, 60 or 90 day LIBOR rate plus 2.0%
for LIBOR loans. In connection with this line of
credit, the Company granted a security interest in
accounts receivable and inventory, as defined in the
loan agreement. (See Note 13)
F-9
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
This credit facility contains certain
covenants that require, among other things, the Company
to maintain levels of current assets to current
liabilities, total liabilities to net worth, working
capital, tangible net worth of $14,147,000 and
certain fixed charge coverage. As of July 1, 1995, the
Company was in compliance with such covenants.
NOTE 7 -- LONG-TERM DEBT
Long-term debt consists of:
<TABLE>
<CAPTION>
July 1, 1995 July 2, 1994
Total Current Total Current
<S> <C> <C> <C> <C>
Capital lease obligations (Note 4) $16,037 $13,190 $163,995 $120,630
Other 130,782 - 128,788 -
Total 146,819 13,190 292,783 $120,630
Current maturities (13,190) (120,630)
$133,629 $172,153
</TABLE>
Annual maturities of long-term debt are
1996, $13,190; 1997, $1,078; 1998, $1,769; 1999, $0;
2000, $0; thereafter, $130,782.
NOTE 8 -- STOCK OPTIONS
The Company has reserved 125,000 and
250,000 shares of common stock under two employee
stock plans, adopted in 1981 and 1991, respectively.
As of July 1, 1995, options to purchase 11,522 shares
under the 1981 Plan and 138,907 shares under the 1991
Plan were outstanding. Each option granted under the
1991 Plan or the 1981 Plan becomes exercisable in
cumulative increments of 20%, 50%, 80% and 100% on
the first, second, third and fourth anniversaries of
the date of grant, respectively, and subject to certain
exceptions with regard to termination of employment
and the percentage of outstanding shares of Common
Stock owned, must be exercised within 10 years from the
date of the grant. The option price, subject to
certain exceptions, may not be less than 100% of the
fair market value per share of Common Stock on the
date of the grant of the option or 110% of such value
for persons who control 10% or more of the voting
power of the Company's stock on the date of grant. A
summary of option transactions and other information
for 1995, 1994 and 1993 follows:
<TABLE>
<CAPTION>
Year Ended
July 1, July 2, July 3,
1995 1994 1993
<S> <C> <C> <C>
Shares under option, beginning of year 124,957 255,686 205,046
Options granted 29,722 - 54,782
Options exercised (1,250 (130,729) (4,142)
Options expired (3,000) - -
Shares under option, end of year 150,429 124,957 255,686
Options exercisable 78,521 16,464 91,607
Prices of options exercised $.75 to $.75 to $.75 to
$1.875 $3.1625 $1.875
Prices of options outstanding, end of year $.75 to $.75 to $.75 to
$5.50 $5.50 $5.50
</TABLE>
F-10
<PAGE>
SPEIZMAN INDUSTRIES INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 9 -- STOCK REDEMPTION AGREEMENTS
The Company has an agreement with its
principal holder whereby, upon his death, the Company
is obligated to redeem a portion of the stock in the
Company held by the estate. The redemption price for
common stock is to be the fair market value of
common stock, less 5%, plus any accrued dividends. In
no case will the Company pay out more than the
amount of life insurance proceeds received by the
Company as a result of the death of the stockholder.
At July 1, 1995, there were 584,932 common
shares covered by the above agreement. The face value
of life insurance carried by the Company under this
agreement amounts to $1,150,000.
NOTE 10 -- PREFERRED STOCK
During the fiscal year ended July 2, 1994,
all of the Company's 5% Non-Voting Preferred Stock was
redeemed and all of the Company's 5% Non-Voting Senior
Convertible Preferred was converted into common stock.
The 5% Non-Voting Preferred Stock was
non-cumulative as to dividends and non-participating
and, in the event of dissolution, was redeemable
at $100 par value per share together with unpaid
dividends and accrued interest, in preference to common
stock distributions.
The 5% Non-Voting Senior Convertible
Preferred Stock (the "Senior Preferred Stock") was
non-cumulative as to dividends and non-participating
and was redeemable at the option of the Company at
$105 per share. In the event of dissolution, the
Senior Preferred Stock was redeemable at par and was
superior to the other series of preferred stock and
to all common stock. The Senior Preferred Stock was
convertible at the option of the holder into shares
of common stock at a conversion price of $3.00 par
value of the Senior Preferred Stock for each share of
common stock (240,766 common shares). As of July 3,
1993, the Senior Convertible Preferred Stock was stated
at its fair value at the time of issuance.
NOTE 11 -- DEFERRED COMPENSATION PLANS
The Company has deferred compensation
agreements with two employees providing for payments
amounting to $2,056,680 upon retirement and from
$1,546,740 to $2,181,600 upon death prior to
retirement. One agreement, as modified, has been in
effect since 1972 and the second agreement was
effective October 1989. Both agreements provide for
monthly payments on retirement or death benefits
over fifteen year periods. Both agreements are funded
under trust agreements whereby the Company pays to
the trust amounts necessary to pay premiums on life
insurance policies carried to meet the obligations
under the deferred compensation agreements.
Charges to operations applicable to those
agreements were approximately $43,881, $72,673 and
$113,885 for the fiscal years 1995, 1994 and 1993,
respectively.
NOTE 12 -- EMPLOYEES' RETIREMENT PLAN
The Company has a 401(k) retirement plan,
effective October 1, 1989, for all qualified employees
of the Company to participate in the plan.
Employees may contribute a percentage of their pretax
eligible compensation to the plan, and the Company
matches 25% of each employee's contribution up to 4% of
pretax eligible compensation. The Company's matching
contributions totaled approximately $17,000, $13,000
and $17,000 in fiscal years 1995, 1994 and 1993,
respectively.
F-11
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 13 -- COMMITMENTS AND CONTINGENCIES
The Company had outstanding commitments
backed by letters of credit of approximately
$8,916,000 and $10,554,000 at July 1, 1995 and
July 2, 1994, respectively, relating to the purchase of
machine inventory for delivery to customers.
The Company has not obtained product
liability insurance to date due to the prohibitive
cost of such insurance. The nature and extent of
distributor liability for product defects is uncertain.
The Company has not engaged in manufacturing
activities since 1990, and management presently
believes that there is no material risk of loss to the
Company from product liability claims against the
Company as a distributor.
NOTE 14 -- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<TABLE>
<CAPTION>
Year Ended
July 1, July 2, July 3,
1995 1994 1993
<S> <C> <C> <C>
Cash paid during year for:
Interest $ 86,704 $ 135,068 $ 212,419
Income taxes 524,464 2,079,097 512,664
</TABLE>
Supplemental data of non-cash investing and financing
activities:
The Company incurred capital lease
obligations in connection with lease agreements to
acquire equipment of $0, $4,304 and $238,238 during
fiscal 1995, 1994 and 1993, respectively.
F-12
<PAGE>
(BDO Seidman LLP Letterhead)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
SPEIZMAN INDUSTRIES, INC.
The audits referred to in our report dated September 1, 1995, relating to the
consolidated financial statements of Speizman Industries, Inc. and subsidairies
which is contained in Item 8 of this Form 10-K included the audit of the
financial statement schedule listed in the accompanying index. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement schedule
based upon our audits.
In our opinion, such consolidated financial statement schedule presents
fairly, in all material respects, the information set forth therein.
(Signature of BDO Seidman, LLP)
Charlotte, North Carolina BDO Seidman, LLP
September 1, 1995
S-1
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Balance at Charged to Charged to Deductions Balance
beginning costs and other from at end
Description of period expenses accounts reserves of period
<S> <C> <C> <C> <C>
Fiscal year ended July 3, 1993:
Reserve for doubtful accounts . . . $ 70,399 $ 83,840 $ - $ 26,678 $127,561
Reserve for inventory obsolescence 423,145 $200,000 $ - $ - $623,145
Fiscal year ended July 2, 1994:
Reserve for doubtful accounts . . . $127,561 $ 17,580 $ - $ 75,440 $69,701
Reserve for inventory obsolescence $623,145 $200,000 $ - $212,114 $611,031
Fiscal year ended July 1, 1995:
Reserve for doubtful accounts . . . $ 69,701 $171,477 $ - $ 34,020 207,158
Reserve for inventory obsolescence $611,031 $200,000 $ - $215,041 $595,990
</TABLE>
S-2
<PAGE>
SPEIZMAN INDUSTRIES, INC.
INDEX TO EXHIBITS
Exhibit Sequential
Number Description of Exhibit Page No.
3.1 Certificate of Incorporation of Speizman Industries,
Inc. (the "Company"). (Incorporated by reference to
Exhibit 3.1 contained in the Company s Registration
Statement on Form S-1 (the "1993 Form S-1"),
registration number 33-69748, filed with the Securities
and Exchange Commission on September 30, 1993, and
amendments thereto.)
3.2 Certificate of Amendment to Certificate of
Incorporation of the Company, dated December 4, 1978.
(Incorporated by reference to Exhibit 3.2 contained in
the 1993 Form S-1.)
3.3 Certificate of Amendment to Certificate of
Incorporation of the Company, dated February 8, 1993.
(Incorporated by reference to Exhibit 3.3 contained in
the 1993 Form S-1.)
3.4 Certificate of Stock Designation of the Company, dated
October 23, 1973. (Incorporated by reference to Exhibit
3.4 contained in the 1993 Form S-1.)
3.5 Certificate of Stock Designation of the Company, dated
June 27, 1978, as modified by Certificate of Increasing
Stock Designated, dated January 11, 1979. (Incorporated
by reference to Exhibit 3.5 contained in the 1993 Form
S-1.)
3.6 Bylaws of the Company, as amended November 7, 1978.
(Incorporated by reference to Exhibit 3.6 contained in
the 1993 Form S-1.)
4.1 Certificate of Incorporation of the Company as
currently in effect (included as Exhibits 3.1 through
3.5). (Incorporated by reference to Exhibit 4.1
contained in the 1993 Form S-1.)
4.2 Bylaws of the Company, as amended November 7, 1978.
(Incorporated by reference to Exhibit 4.2 contained in
the 1993 Form S-1.)
4.3 Specimen Common Stock Certificate. (Incorporated by
reference to Exhibit 4.3 contained in the 1993 Form S-1.)
10.1 Agency Agreement between the Company and Lonati,
S.r.l., Brescia, Italy ("Lonati"), dated January 2,
1992, relating to the Company's distribution of
machines in the United States. (Incorporated by
reference to Exhibit 10.1 contained in the 1993 Form S-1.)
10.2 Agency Agreement between the Company and Lonati, dated
January 2, 1992, relating to the Company's distribution
of machines in Canada. (Incorporated by reference to
Exhibit 10.2 contained in the 1993 Form S-1.)
10.3 Agency Agreement between the Company and Santoni,
S.r.l., Brescia, Italy ("Santoni"), dated January 2,
1992 ("Santoni Agreement"). (Incorporated by reference
to Exhibit 10.3 contained in the 1993 Form S-1.)
10.4 Letter from Santoni relating to the Santoni Agreement,
dated June 8, 1992. (Incorporated by reference to
Exhibit 10.4 contained in the 1993 Form S-1.)
10.5 Letter Agreement between the Company and Santoni
relating to the Santoni Agreement, dated July 21, 1993.
(Incorporated by reference to Exhibit 10.5 contained in
the 1993 Form S-1.)
10.6 Agreement between the Company and Jumberca, S.A.
Badalona, Spain ("Jumberca") dated October 20, 1992, in
original Spanish and an uncertified English
translation. (Incorporated by reference to Exhibit 10.6
contained in the 1993 Form S-1.)
10.7 Agreement between the Company and Jumberca, dated July
13, 1993. (Incorporated by reference to Exhibit 10.6.1
contained in the Company's Annual Report on Form 10-K
(the "1994 Form 10-K") for the fiscal year ended July
2, 1994, File No. 0-8544, filed on September 30, 1994.)
10.8 Agreement between the Company and Jumberca dated
February 1, 1994, in original Spanish and an
uncertified English translation. (Portions of Exhibit
10.8) were omitted pursuant to a request for
confidential treatment filed with the Securities and
Exchange Commission ("Commission"). The omitted
portions were filed separately with the Commission.)
(Incorporated by reference to Exhibit 10.6.2 contained
in the Company's Annual Report on Form 10-K/A Amendment
No. 1 for the fiscal year ended July 2, 1994, File No.
0-8544, filed on December 12, 1994.)
10.9 Collaboration Agreement between the Company and
Jumberca dated May 10, 1994. (Incorporated by
reference to Exhibit 10.6.3 contained in the Company's
1994 Form 10-K).
<PAGE>
10.10 Agreement between the Company and Jumberca, dated March 41
16, 1995.
10.11 Fax to Jumberca dated July 28, 1995, canceling fabric 47
portion of agreement effective July 31, 1995.
10.12 Fax to Jumberca dated August 22, 1995, canceling 48
sweater portion of agreement effective December 31,
1995.
10.13 Agency Agreement between the Company and Zamark,
S.p.A., Somma Lombardo, Italy, dated August 3, 1992.
(Incorporated by reference to Exhibit 10.7 contained in
the Company's 1994 Form 10-K.)
10.14 Distributorship Agreement between the Company and Conti
Complett, S.p.A., Milan, Italy, dated October 2, 1989.
(Incorporated by reference to Exhibit 10.8 contained in
the Company's 1994 Form 10-K.)
10.15 Letter from Orizio Paolo, S.p.A., Brescia, Italy, dated 48
July 18, 1995, appointing Company as its exclusive
distributor.
10.16 Split Dollar Insurance Agreement, dated January 15,
1992, between the Company and Richard A. Bigger, Jr.,
Successor Trustee of the Robert S. Speizman Irrevocable
Insurance Trust. (Incorporated by reference to Exhibit
10.13 contained in the 1993 Form S-1.)
10.17 Lease Agreement between the Company and Speizman
Brothers Partnership, dated as of December 12, 1990.
(Incorporated by reference to Exhibit 10.14 contained
in the 1993 Form S-1.)
10.18 Lease Amendment and Extension Agreement between the 49
Company and Speizman Brothers Partnership dated April
1, 1995.
10.19 Deed of Lease between Speizman Canada, Inc., and Metro
II & III, undated, as renewed by letter agreement,
dated February 17, 1992. (Incorporated by reference to
Exhibit 10.19 contained in the 1993 Form S-1.)
10.20 Letter Agreement extending lease between Speizman 53
Canada, Inc., and Metro II & III, dated October 21,
1994.
10.21 Agreement of Lease between the Company and LBA
Properties, Inc., dated June 2, 1994. (Incorporated by
reference to Exhibit 10.17.1 contained in the Company s
1994 Form 10-K.)
10.22 Lease Agreement between the Company and B.F. Knott,
dated May 12, 1993. (Incorporated by reference to
Exhibit 10.18 contained in the Company's 1994 Form 10-
K.)
10.23 Modification and Extension of Lease between the Company
and B.F. Knott, dated March 29, 1994. (Incorporated by
reference to Exhibit 10.18.1 contained in the Company's
1994 Form 10-K.)
10.24 Modification and Extension of Lease between the Company 54
and B.F. Knott, dated October 17, 1994.
10.25 Modification and Extension of Lease between the Company 55
and B.F. Knott, dated February 13, 1995.
10.26 Lease Agreement between the Company and Daniel H. 57
Porter, dated August 17, 1995.
10.27* 1981 Incentive Stock Option Plan of the Company.
(Incorporated by reference to Exhibit 10.19 contained
in the 1993 Form S-1.)
10.28* 1991 Incentive Stock Option Plan and Amendment to 1981
Incentive Stock Option Plan of the Company.
(Incorporated by reference to Exhibit 10.20 contained
in the 1993 Form S-1.)
10.29* 1991 Incentive Stock Option Plan, as Amended and
Restated Effective September 20, 1993, of the Company.
(Incorporated by reference to Exhibit 10.21 contained
in the 1993 Form S-1.)
10.30* Restated Deferred Compensation Agreement, dated May 22,
1989, between the Company and Josef Sklut, as amended
by Amendment to Deferred Compensation Agreement, dated
December 30, 1992 (the "Deferred Compensation
Agreement"). (Incorporated by reference to Exhibit
10.27 contained in the 1993 Form S-1.)
10.31* Restated Trust Agreement, dated May 22, 1989, between
the Company and First Citizens Bank and Trust Company,
as amended by First Amendment to Trust Agreement dated
December 30, 1992, relating to the Deferred
Compensation Agreement. (Incorporated by reference to
Exhibit 10.28 contained in the 1993 Form S-1.)
10.32* Executive Bonus Plan of the Company, adopted February
2, 1990, as amended March 5, 1990. (Incorporated by
reference to Exhibit 10.29 contained in the 1993 Form
S-1.)
10.33* Executive Bonus Plan of the Company, adopted July 20,
1993. (Incorporated by reference to Exhibit 10.30
contained in the 1993 Form S-1.)
10.34* Resolutions of the Company's Board of Directors dated 58
<PAGE>
November 15, 1995, extending Executive Bonus Plan
adopted July 20, 1993.
10.35 Redemption Agreement between the Company and Robert S.
Speizman, dated May 31, 1974, as amended by Modified
Redemption Agreement, dated April 14, 1987, Second
Modified Redemption Agreement, dated September 30,
1991, and Third Modified Redemption Agreement, dated as
of July 14, 1993. (Incorporated by reference to Exhibit
10.34 contained in the 1993 Form S-1.)
10.36 Fourth Modified Redemption Agreement between the 59
Company and Robert S. Speizman, dated September 14,
1994.
10.37 NationsBank of North Carolina, National Association
$12,000,000 Credit Facility for Speizman Industries,
Inc., dated April 19, 1994. (Incorporated by reference
to Exhibit 10.45 contained in the 1994 Form 10-K.)
10.38 1995 Consolidated Amendment Agreement to Loan Agreement 62
and Related Documents dated May, 1995.
11 Statement re: Computation of Net Income per Share 70
23 Consent of BDO Seidman 71
* Represents a management contract or compensatory plan or
arrangement of the Registrant.
<PAGE>
AGREEMENT BETWEEN SPEIZMAN INDUSTRIES, INC. - USA
AND JUMBERCA, S.A. OF BADALONA, SPAIN
Speizman agrees to purchase the fabric machines in Exhibit A and you
agree to deliver them as described in the delivery schedule outlined in
Exhibit A. If machines are not shipped within 30 days of the designated
schedule, Speizman has the right to cancel the late machines and Jumberca
agrees to return the deposit which applies to the late machines.
You also reconfirmed the agreements reached in your fax 53:903 of March 6,
1995. For clarification sake, we attach a copy of your fax 53:903 as
Exhibit B. In addition, Jumberca confirms that Speizman's right to sell the
sweater machines is exclusive to Speizman in the USA and Canada through
December 31, 1995.
Jumberca agrees not to appoint another agent or distributor for their
fabric machines before June 15, 1995. With no further notice, either party
may cancel the fabric machine portion of the contract after June 15, 1995.
Jumberca agrees that should Speizman continue as the exclusive distributor
in the United States and Canada for the sweater machines after December 31,
1995, that Speizman would also have the exclusive right to operate Jumberca
Service and Parts in the United States and Canada, according to the terms
of purchase as specifically agreed. Speizman would also have the exclusive
right, after consultation with Jumberca, to determine which personnel will be
retained from Jumberca Service and Parts - USA and Canada.
Agreed to:
SPEIZMAN INDUSTRIES, INC. JUMBERCA, S.A.
By: (Robert J. Speizman's signature By: (Jumberca signature
appears here) appears here)
Its: President Its:
Date: March 16, 1995 Date: (Jumberca logo
appears here)
<PAGE>
CONTRATO ENTRE SPEIZMAN INDUSTRIES, INC. - USA
Y JUMBERCA, S.A. DE BARCELONA, ESPANA
Speizman conviene a la compra de las maquinarias de tejido en el
"Exhibit A" y Jumberca conviene a la entrega de las maquinarias como dicta
la plan de entrega detallado en el "Exhibit A". Si las maquinarias no estan
embarcada dentro de 30 dias del plan designado, Speizman tiene el derecho
de cancelar la las maquinarias entrgadas con retraso y Jumberca conviene a
devolver el deposito que aplica a estas maquinarias.
Jumberca reconfirma los acuerdos dictados en su fax 53:903 del 6 de Marzo
de 1995. Para clarificar estos acuerdos anexamos la copia de su fax 53:903
como "Exhibit B". En addicion, Jumberca confirma que el derecho de Speizman
de efectuar ventas de las maquinarias de sueters es exclusivamente de
Speizman en USA y Canada hasta de el 31 de diciembre de 1995.
Jumberca acuerda a no nombrar otro agente o distribuidor para sus
maquinarias de tejido antes de el 15 de Junio de 1995. Sin notificacion
alguna, cualquier parte puede cancelar la parte del contrato de las
maquinarias de tejido despues del 15 de Junio de 1995.
Jumberca conviene a que si Speizman continua como distribuidor exclusivo
en los Estados Unidos y Canada de las maquinarias de sueters despues del
31 de Diciembre de 1995, Speizman podra tener el derecho de exclusividad
para operar los Servicios y Partes de Jumberca en los Estados Unidos y
Canada en los terminos de venta que especificamente se acuerden. Speizman
tambien tendra el derecho exclusivo, despues de consultar con Jumberca,
para determinar que personnel de Jumberca Service and Parts-USA and Canada
permanecera en sus cargos respectivos.
Acuerdan el 16 de Marzo de 1995
SPEIZMAN INDUSTRIES, INC. JUMBERCA, S.A.
(Signature of Robert S. (Signature of A. M. Pont
Speizman appears here) appears here)
Robert S. Speizman A. M. Pont
CEO/President Director Marketing
(Jumberca logo
appears here)
<PAGE>
Exhibit A - March 16, 1995
2 Jumberca DJE-2, 28 cut*, 30" circular knitting machine, double knit
jacquard, electronic selection, type of fabric: 2, 3 and 4 color double
knit jacquard, Blister jacquard, Tubular jacquard, Tuck stitch, with all
standard equipment as listed below:
and
3 Jumberca DJE-2, 18* cut, 30" circular knitting machine, double knit
jacquard, electronic selection, type of fabric: 2, 3 and 4 color double
knit jacquard, Blister jacquard, Tubular jacquard, Tuck stitch, with all
standard equipment as listed below:
* Speizman Industries has the right to determine the exact cut of the DJE-2
machines by April 15, 1995.
STANDARD EQUIPMENT
- -Three legged frame
- -Side creel. One cone with spare cone per feed, with yarn guide up to the
feeder by means of tubes. Threading by compressed air.
- -Selection system on dial by means of 5 position manually programmable
selectors for positions of Knit-Miss or Tuck-Miss on each feed.
- -1 needle track in cylinder with 1 type of needle and 3 positions per feed:
Knit, Tuck and Miss (three-way technique).
- -12 level selection boxes with double electronic selection on cylinder on each
feed.
- -Electronic controller for jacquard selection.
- -Dial height control by means of clock indicator.
- -Lint blower equipment for revolving fans.
- -Rotative compressed-air lint blower on needles dial.
- -Control stop-motions: Needles and remounting of the fabric.
- -Spary oiler (antimist) for needles.
- -Take-down: Positive pulling with manual adjustment. Fabric roller over
central nucleus with adjustable tension for clutch.
- -A.C. motor with electronic speed variator.
- -Manual handles.
- -Adjustable starting and variable braking intensity.
- -Electrical control panel.
- -Fabric winder central bar with lateral rings.
- -36 cams for single and double blister.
- -Equipment necessary to install lycra feeders on all feeds (lycra feeders
to be supplied by customer.)
5 machines @ $116,000 $580,000.00
1 Scorpio software 6,000.00
Total $586,000.00
Speizman has the option to cancel this order in its entirety should
Richland not approve of the first machine currently in their factory. Such
approval and cancellation must be given by Speizman no later than April 15,
1995.
Shipment via sea freight leaving the Jumberca factory no later than
July 15, 1995.
Payment: 15% with order ($87,900.00). Balance by irrevocable letter of
credit payable 90 days from date of on-board bill of lading.
<PAGE>
5 Jumberca DIB, 60 feed, 30", 14 cut
complete with side 2 creel, double feed
Memminger feeders with all standard cams
@ $37,000 each $185,000.00
2 sets of thermal cams
(35 cams of "work" in the plate
21 cams of "loaded knit" in the plate
4 cams of "voiding" in the plate
35 cams of "work" in the cylinder
21 cams of "loaded knit" in the cylinder
4 cams of "voiding" in the cylinder
Total of cams in the plate = 60
Total of cams in the cylinder = 60)
Price for kit $2,863.20 x 2 5,726.40
Total $190,726.40
Shipment from Jumberca factory: 1 by May 31, 1995; 4 by June 25, 1995.
Shipped to Speizman Industries, 508 W. Fifth Street. Please notify
Speizman prior to shipment.
Terms: 15% deposit ($28,608.90) with confirmation of order. Balance by
irrevocable letter of credit payable 90 days from date of on-board bill
of lading.
GRAND TOTAL OF EXHIBIT A
10 machines $776,726.40
Total of 15% downpayment 116,508.90
85%-90 day letter of credit 660,217.10
<PAGE>
(Jumberca letterhead appears here)
SERVICIO TELEFAX
DESTINO : SPEIZMAN INDUSTRIES, INC.
ATENCION: Mr. Robert Speizman
FAX NR. : 53.903
FECHA : 06.03.95
NUMERO DE PAGINAS INCLUIDA ESTA 2
TEXTO:
Asunto: Nuestro fax 53.852 del 03.03.95
Su fax dle 1338/95 del 06.03.95
Apreciado Mr. Speizman
En el meeting de la proxima semana definiremos exactamente los detalles de
la nueva etapa en nuestro relacionamiento comercial.
Entretanto, por los resultados obtenidos y atendiendo a sus comentarios:
- -Consideramos terminada la distribucion de maquinas de Pieza Continua por
SPEIZMAN.
- -El contrato para Sweaters debe finalizar a 31 Diciembre 1995.
- -Quedan sin efecto los minimos establecidos de venta de maquinas.
Para ser coherentes con su propuesta, estos puntos anteriores van ligados
a la compra de las 10 maquinas y demas compromisos de su fax 1318 de fecha
1 de Marzo 1995.
En dia de hoy, el programa de maquinas de Sweaters disponibles para suministro
es el siguiente:
ABRIL MAYO
1a quincena 3 DWN-3E gg 7 3 DWN-3E gg 4
1 DWN-3E gg 12
2 TLJ-5E gg 7
2a quincena 2 DWN-3E gg 7
1 DWN-3E gg 12
<PAGE>
Podran observar que las maquinas disponibles varian progresivamente, por
lo cual rogamos nos envien sus ordenes de forma inmediata.
Tambien pueden transferir y los 200.000 - US $.
Atentamente,
JUMBERCA, S.A.
A. M. Pont
Director Marketing
<PAGE>
COMPANY : SPEIZMAN INDUSTRIES
ATTN : MR. ROBERT SPEIZMAN
FAX NO. : 53.903
DATE : MARCH 6, 1995
RE: Our fax 53.852 dated 3/3/95
Your fax 1338/95 dated 3/6/95
Dear Mr. Speizman:
In the meeting next week we will define exactly the details of the new stage
in our commercial relationship.
Meanwhile, due to the results obtained and complying to your comments:
- -We consider Speizman's distribution of Pieza Continua (Continuous Piece)
machines finished.
- -The contract for Sweaters should finalize December 31, 1995.
- -The established minimum sales of machines is no longer in effect.
To be coherent with your proposal, the above mentioned points go along with
the purchase of the 10 machines and other agreements according to your fax
1318 dated March 1, 1995.
As of today, the program of Sweater machines available for supply is the
following:
ABRIL MAYO
1st half of the month 3 DWN-3E gg 7 3 DWN-3E gg 4
1 DWN-3E gg 12
2 TLJ-5E gg 7
2nd half of the month 2 DWN-3E gg 7
1 DWN-3E gg 12
<PAGE>
You may observe that the machines available differ progressively, this
is the reason why we ask to please send your orders immediately.
You may now transfer as well the $200,000.00.
Sincerely,
JUMBERCA, S.A.
A. M. Pont
Marketing Director
<PAGE>
* * * F A X * * *
SPEIZMAN INDUSTRIES, INC.
P.O. Box 31215, Charlotte, NC 28231
Phone: 704/372-3751 Fax: 704/376-3153
COMPANY: Jumberca TOTAL NO. PAGES 1
ATTN: Mr. Pont If you do not receive the
Mr. Torres indicated number of pages,
please contact us at
FROM: Bob Speizman 704/372-3751.
DATE: July 28, 1995
SUBJECT: FABRIC MACHINES
FAX NO: 1839/95
*************************************************************************
Dear Mr. Pont and Mr. Torres:
This is to inform you that Speizman Industries has decided not to continue
the sale of Jumberca fabric machines as of July 31, 1995. This is per our
agreement of June 15, 1995.
We hope to cooperate with you in every way and will certainly be willing to
work with your new agent. We would be delighted to sell your new agent our
inventory of DJE-2 and DIB machines, or work with him in the sale of same.
Very truly yours,
SPEIZMAN INDUSTRIES, INC.
(Signature of Robert S. Speizman appears here)
Robert S. Speizman
President
* * * F A X * * *
SPEIZMAN INDUSTRIES, INC.
P.O. Box 31215, Charlotte, NC 28231
Phone: 704/372-3751 Fax: 704/376-3153
COMPANY: Jumberca TOTAL NO. PAGES 1
ATTN: Mr. A.M. Pont If you do not receive the
indicated number of pages,
FROM: Bob Speizman please contact us at
704/372-3751.
DATE: August 22, 1995
SUBJECT:
FAX NO: 1862/95
*****************************************************************************
Dear Mr. Pont:
We have decided that we do not want to make an offer to continue our contract
for the sweater machines after our contract expires on December 31, 1995.
We will certainly cooperate in every reasonable way to make the transition
to your new agent as smooth as possible.
For market stability, we hope that you and your new agent can assist us in
disposing of our inventory of new Jumberca sweater and fabric machines.
All of us at Speizman appreciate the time we have worked together and wish
you the best for the future.
Sincerely,
(Signature appears here)
July 18, 1995
Robert S. Speizman, President
Speizman Industries, Inc.
P.O. Box 31215
Charlotte, NC 28231
Dear Bob:
This will confirm the appointment of Speizman Industries as our exclusive
distributor in the United States for a period of two years commencing
August 1, 1995.
Speizman will have the exclusive rights to sell our equipment in the United
States, its territories and possessions. In addition, effective January 1,
1996, through July 31, 1997, Speizman Industries will have the exclusive
right to service and sell spare parts for our equipment in the United States.
It is understood that HTS Services will continue to act on our behalf
for our service and spare parts of new Orizio machines in your territory
until December 31, 1995.
I will send you all of the details of the method of payment, warranty
on our equipment and other details in the next week to ten days followed
by the official contract.
Sincerely,
ORIZIO PAOLO, S.p.A. IN ACCEPTANCE:
(Signature of Alberto Orizio appears here) (Signature appears here)
Alberto Orizio Speizman Industries, Inc.
<PAGE>
STATE OF NORTH CAROLINA
LEASE AMENDMENT AND
COUNTY OF MECKLENBURG EXTENSION AGREEMENT
This LEASE AMENDMENT AND EXTENSION AGREEMENT (the "Agreement"),
is made effective the 1st day of April, 1995, by and between SPEIZMAN BROTHERS
PARTNERSHIP ("Lessor" herein) and SPEIZMAN INDUSTRIES, INC. ("Tenant" herein).
STATEMENT OF PURPOSE
A. Lessor entered into a written lease agreement with Tenant dated
December 12, 1990 (the "Lease"), pursuant to which Lessor leased to Tenant
and the Tenant leased from Lessor the Leased Premises described therein which
are located at 508 West Fifth Street, Charlotte, North Carolina.
B. The parties now wish to amend the Lease to extend the Lease Term and
modify the rents payable thereunder.
C. The parties enter into this Agreement in order to document their
understandings and undertakings in respect to the desired extension and
amendments to the Lease.
NOW, THEREFORE, in consideration of the Statement of Purpose (which by
this reference is made a substantive part of this Lease Amendment and
Extension Agreement) and other valuable considation exchanged, the adequacy,
sufficiency and delivery of which are acknowledged by the parties, Lessor
and Tenant mutually agree:
1. Incorporation of Statement of Purpose. The parties hereto ratify and
incorporate by reference the Statement of Purpose set forth above.
2. Additional Term. Lessor hereby leases and demises to Tenant, and Tenant
hereby rents and takes from Lessor the Leased Premises for an additional
term of one (1) year, commencing at midnight on the 1st day of April, 1995,
and ending on March 31, 1996, upon the same terms and conditions as set forth
in the Lease, except as herein modified.
3. Rental During Additional Term. The rent amount during the Additional
Term shall be the sum of THREE HUNDRED ELEVEN THOUSAND FIVE HUNDRED TWENTY
and NO/100 ($311,520.00) per year, in monthly installments of
TWENTY-FIVE THOUSAND NINE HUNDRED SIXTY and NO/100 DOLLARS ($25,960.00)
payable on the first day of each month during the term hereof, commencing
on the 1st day of April, 1995.
4. Ratification of Lease. Except as herein amended and extended, the parties
ratify and confirm the Lease. Further, as of the date of this Agreement,
Tenant hereby certifies to Lessor that: (a) the Lease, as amended, is in
full force and effect; (b) Lessor has performed all of its obligations
and satisfied all of its conditions arising under the Lease; and
(c) Tenant has not assigned, sublet or encumbered its interest in the Lease.
<PAGE>
5. Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of Lessor and the Parties constituting the Tenant, jointly and
severally, and their respective personal representatives, heirs, successors
and permitted assigns.
6. Entire Agreement. This Agreement contains the entire agreement of the
parties hereto, and no change, qualification or cancellation hereof shall be
effective unless set forth in a writing signed by the parties hereto.
7. Notices. All notices, requests, consents and other communications in
connection with this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed in the United States Mail,
First Class, postage prepaid and addressed as follows:
As to Seller: Speizman Brothers Partnership
c/o Robert S. Speizman
508 West 5th Street
P.O. Box 31215
Charlotte, North Carolina 28231
As to Tenant: Speizman Industries, Inc.
508 West 5th Street
P.O. Box 31215
Charlotte, North Carolina 28231
8. Severability. In the event that any portion of this Agreement is found
to be in violation of or conflict with any federal or state law, the parties
agree that the invalidity or unenforceability of such provision shall be in
no way render invalid or unenforceable any other part of provision hereof.
9. Governing Law. This Agreement shall be construed and enforced in
accordance with the applicable provisions of North Carolina law, and the
parties hereto do further agree and stipulate that any dispute hereunder
shall be brought in the court of proper jurisdiction (State or Federal)
in Charlotte, Mecklenburg County, North Carolina.
-2-
<PAGE>
IN WITNESS WHEREOF, the Lessor and Tenant have each executed this Agreement
as of the day and year set forth above.
SPEIZMAN BROTHERS PARTNERSHIP
(Signature of Robert S. Speizman appears here)
Robert S. Speizman
(Signature of Lawrence J. Speizman appears here)
Lawrence J. Speizman
SPEIZMAN INDUSTRIES, INC.
(Signature of Robert S. Speizman appears here)
Robert S. Speizman, President
ATTEST:
(Signature appears here)
Secretary
[CORPORATE SEAL]
(Corporate Seal appears here)
-3-
<PAGE>
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
I, Dana Gail Russell a Notary Public in and for said County and State
do hereby certify that Robert S. Speizman, personally appeared before me this
day and acknowledged the due execution of the foregoing instrument.
Witness my hand and notarial seal, this the 28th day of March, 1995.
(SIGNATURE OF DANA GAIL RUSSELL APPEARS HERE)
NOTARY PUBLIC
MY COMMISSION
MY COMMISSION EXPIRES: EXPIRES JUNE 25, 1996
[SEAL]
STATE OF FLORIDA
COUNTY OF PALM BEACH
I, Norma W. Gearing a Notary Public in and for said County and State do
hereby certify that Lawrence J. Speizman, personally appeared before me this
day and acknowledged the due execution of the foregoing instrument.
Witness my hand and notarial seal, this the 3 day of April, 1995.
(Signature of Norma W. Gearing appears here)
Notary Public
My Commission Expires: 7/18/98
[SEAL]
(Official Notary Public Seal
NORMA W. GEARING
(Logo of the Notary COMMISSION NUMBER
Public State of CC381769
Florida MY COMMISSION EXP.
appears here) JULY 18, 1998)
-4-
<Page
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
I, Dana Gail Russell a Notary Public of the County and State aforesaid,
certify that Robert S. Speizman personally came before me this day and
acknowledged that he is the President of SPEIZMAN INDUSTRIES, INC. and that by
authority duly given and as the act of the corporation, the foregoing
instrument was signed in its name, sealed with its corporate seal and attested
by its Corporate Secretary.
Witness my hand and official stamp or seal, this the 28th day of March,
1995.
(SIGNATURE OF DANA GAIL RUSSELL APPEARS HERE)
NOTARY PUBLIC
MY COMMISSION
MY COMMISSION EXPIRES: EXPIRES JUNE 25, 1996
[SEAL]
-5-
<PAGE>
(Logo appears here)
GESTION SAMIJO INC./SAMIJO MANAGEMENT INC.
8300 PIE IX, MONTREAL, QUE HIZ 4E8
BY TELECOPIER: 321-7843
October 21, 1994
Speizman Canada Inc.
5205 Metropolitain East
Montreal, Quebec
H1R 127
Attention: Mrs. Bruna Dilrancesch
Re: Lease extension respecting premises located at
5205 Metropolitain East ("Leased Premises")
Dear Madam:
This is to confirm our recent agreement with respect to the above-captioned
Leased Premises.
WHEREAS SPEIZMAN CANADA INC. ("Lessee") is desirous of renewing its Lease
commencing on the 1st day of March 1989 and terminating on the last day
of February 1992 for those certain premises of the building bearing civic
address 5205 Metropolitain East and Samijo Management Inc. acting on behalf
of the owners of the building ("Lessor") agrees to same;
WHEREFORE THE PARTIES AGREE AS FOLLOWS:
1. That said renewal shall be for a period of one (1) year commencing on
March 1st, 1995 and terminating on the last day of February 1996;
2. That said renewal shall be upon the same terms and conditions as the
presently existing Leased Premises, including the rental rate which
shall be $315.00 gross per month, save and except for its proportion
of the non-residential municipal surtax.
<PAGE>
(Logo appears here)
/...2
3. That in all other respects said presently existing Lease is affirmed.
4. That the parties declare that they have requested that this agreement
be drawn up in the English Language; Les parties declarent par les
presentes qu ils exigent que catte entenie soit redigee dans la languc
anglaisc.
5. This agreement may be executed in several counterparts, each of which
so executed shall be deemed to be an original and such counterparts
together shall constitute one and the same instrument.
SIGNED AND ACCEPTED THIS 24 DAY OF OCT 1994.
SAMIJO MANAGEMENT INC.,
acting on behalf of the owners of the building
(Lessor)
(Signature appears here)
Per: Witness
SPEIZMAN CANADA INC.
(Lessee)
(Signature appears here) (Signature appears here)
Per: Witness VP Finance
STATE OF NORTH CAROLINA MODIFICATION AND EXTENSION
OF LEASE
COUNTY OF MECKLENBURG
THIS MODIFICATION AND EXTENSION OF LEASE made this 17 day of October,
1994, by and between B.F. Knott (LANDLORD), and Speizman Industries, Inc.
(TENANT):
WITNESSETH
The parties hereto do hereby ratify and affirm the provisions of that
LEASE AGREEMENT, dated May 10, 1993, by and between the parties for the
premises known as 1306 Berryhill Road, and the MODIFICATION AND EXTENSION
OF LEASE through January 31, 1995, which are hereby fully incorporated herein
except for the following:
1. The parties extend this LEASE AGREEMENT for an additional six (6)
months beginning February 1, 1995 and ending July 31, 1995.
2. During this extension, Tenant shall pay to Landlord rental of
$34,375.02 in six (6) monthly installments of $5,729.17 each.
3. Landlord will be able to take possession of the premises on or
before August 1, 1995. From the date of this Modification and Extension
through July 31, 1995, Landlord may place signs on the property for sale
or lease and Landlord may show the premises to prospective purchasers or
tenants during all reasonable hours upon reasonable notice to Tenant.
4. Upon departure from the premises Tenant will clean all warehouse
floors and leave them free of grease, oil, dirt and other foreign material
and Tenant will clean all carpeting in the offices.
IN WITNESS WHEREOF, this Modification and Extension of Lease has been
duly executed by the Landlord and Tenant as of the day and year first above
written.
LESSOR: B.F. KNOTT
By: [signature]
LESSEE: SPEIZMAN INDUSTRIES, INC.
By: Josef Sklut
VP FINANCE
STATE OF NORTH CAROLINA MODIFICATION AND EXTENSION
OF LEASE
COUNTY OF MECKLENBURG
THIS MODIFICATION AND EXTENSION OF LEASE made this 13 day of
February, 1995, by and between B.F. Knott (LANDLORD), and Speizman Industries,
Inc. (TENANT):
WITNESSETH
__________
The parties hereto do hereby ratify and affirm the provisions of that
LEASE AGREEMENT, dated May 10, 1993 by and between the parties for the
premises known as 1306 Berryhill Road, and the MODIFICATION AND EXTENSION OF
LEASE through January 31, 1995 and the MODIFICATION AND EXTENSION OF LEASE
through July 31, 1995, which are hereby fully incorporated herein except for
the following:
1. The parties extend this LEASE AGREEMENT for an additional nine (9)
months beginning August 1, 1995 and ending April 30, 1996.
2. During this extension, Tenant shall pay to Landlord rental of
$51,562.53 in nine (9) monthly installments of $5,729.17 each.
3. Landlord will be able to take possession of the premises on May 1,
1996. From the date of this Modification and Extension through April 30, 1996,
Landlord may place signs on the property for sale or lease and Landlord may
show the premises to prospective purchasers or tenants all reasonable hours
upon reasonable notice to Tenant.
4. Upon Departure from the premises, Tenant will clean all warehouse
floors and leave them free of grease, oil, dirt and other foreign material
and Tenant will clean all carpeting in the offices.
IN WITNESS WHEREOF, this Modification and Extension of Lease has been
duly executed by the Landlord and Tenants as of the day and year first above
written.
LESSOR: B.F. KNOTT
By: (Signature of B.F. Knott Goes Here
__________________________________
LESSEE: SPEIZMAN INDUSTRIES, INC.
By: (Signature of Robert S. Speizman, Pres. Here)
________________________________
COMMERCIAL LEASE - RENEWAL
This lease is made between Daniel H Porter
8620 Wilkinson Blvd.
Charlotte, NC 28214
herein called Lessor and Speizman Industries, Inc.
508 West 5th St.
Charlotte, NC 28202
herein called Lessee
Lessee hereby offers to lease from Lessor the premises situated at 8600
Wilkinson Blvd. Charlotte, NC 28124, upon the following Terms and Conditions:
Lessee will lease the premises for a term of one (1) year, commencing October
1, 1995 and terminating September 30, 1996 for an annual rental of $48,000
payable in equal installments of $4,000.00 payable by the tenth day of each
month for that month's rental, during the term of this lease.
A security bond of $8,000.00 paid in advance for the predecessor lease on these
same premises is acknowledged by the lessor.
The lessee shall be responsible for damages to buildings or fixtures caused by
Lessee. Lessee shall be responsible for normal light bulb replacement and
plumbing repairs necessary as a result of negligence. Lessee shall replace any
light or plumbing fixtures damaged as a result of negligence. Lessor will
replace or repair light and plumbing fixtures as necessary other than damaged
by negligence.
Lessee shall be responsible for all utility and water bills.
Lessee shall be responsible for maintaining the alarm system. Lessor will answer
alarm calls.
Lessee shall be responsible for all content insurance. Lessor will carry fire
insurance on the building.
Lessor will maintain the yard.
SIGNED THIS 17 DAY OF Aug , 1995
___ ___ __
BY: (Signature of Josef Sklut Here) BY: (Signature of Daniel H. Porter Here)
_____________________________ ____________________________________
Lessee Lessor
Exhibit 10.34
SPEIZMAN INDUSTRIES, INC.
November 15, 1994
RESOLUTION
FURTHER RESOLVED: That, pursuant to the recommendation
of the Compensation Committee, the Board of Directors of
this Corporation does hereby extend the present bonus plan
and order that it be continued in the current fiscal year.
(Signature of Josef Sklut)
____________________________________
JOSEF SKLUT, Secretary
APPROVED:
(Signature of Robert S. Speizman)
___________________________________
ROBERT S. SPEIZMAN, Chairman
<PAGE>
SPEIZMAN INDUSTRIES, INC.
SECRETARY'S CERTIFICATE
I, Josef Sklut, hereby certify that I am a duly elected and qualified
Secretary of Speizman Industries, Inc., a Delaware corporation (the "Company"),
and that attached hereto is a true and correct copy of a resolution of the
Board of Directors of the Company duly adopted by the Board of Directors of
the Company in accordance with the bylaws of the Company and the laws of the
State of Delaware on the 15th day of November, 1994. This resolution has not
been amended, rescinded or modified since its adoption and remains in full
force and effect as of the date hereof.
This 27th day of September, 1995.
(Signature of Josef Sklut)
___________________________________
Josef Sklut, Secretary
[CORPORATE SEAL]
<PAGE>
STATE OF NORTH CAROLINA
FOURTH MODIFIED REDEMPTION AGREEMENT
COUNTY OF MECKLENBURG
THIS FOURTH MODIFIED REDEMPTION AGREEMENT is dated September 14, 1994,
by and between ROBERT S. SPEIZMAN (the "Stockholder") and SPEIZMAN INDUSTRIES,
INC. (the "Company").
W I T N E S S E T H:
The parties hereto have previously entered into a Redemption Agreement
dated May 31, 1974, that was mutually terminated by Agreement dated March 6,
1980, reinstated and modified by Modified Agreement dated April 14, 1987 and
thereafter further modified by a Second Modified Redemption Agreement dated
September 30, 1991, and by a Third Modified Redemption Agreement dated July
14, 1993 (all collectively known as the "Redemption Agreement"); and
The parties desire to further modify the Redemption Agreement in certain
respects, mainly to reduce the amount to be set aside for the costs of
transition and management upon the death of the Stockholder, to remove surplus
language, and to restate the Agreement in its entirety, to enhance its
readability;
NOW, THEREFORE, the restated Agreement reads as follows:
WHEREAS, the Stockholder owns a substantial portion of the outstanding
common stock of the Company; and
WHEREAS, the Stockholder desires assurance that if he should pass away his
Estate will have sufficient funds to pay estate and inheritance taxes and
expenses incident to the transfer of his Estate; and
WHEREAS, it is in the interest of the Company and its stockholders that
arrangements be made for redemption of all or a portion of the common stock of
Stockholder in the event of his decease; and
WHEREAS, the Company has secured ordinary life insurance policies on the
life of the Stockholder in the principal sum of $1,150,000, the proceeds of
which are payable to the Company;
It is therefore agreed:
1. Purchase of Securities. Upon the decease of the Stockholder, the
Company, upon written demand made by the legal representatives of the Estate
of the Stockholder at any time within two (2) years after decease, will
purchase all or a portion of the common stock of the Company owned by the
Stockholder on the date of his death (the common stock being hereinafter
referred to as the
<PAGE>
Securities) in accordance with the terms and conditions
hereinafter set forth.
2. Purchase Price. The "purchase price" for each share of common stock sold
hereunder shall be equal to the fair market value per share less a discount of
5% from said fair market value. Said purchase price shall be determined as of
the date the option granted the legal representatives of the Estate of the
Stockholder is exercised by written notice to the Company under paragraph 1
hereof. For the purpose hereof, the term "fair market value" per share shall
mean the last sale price in the over-the-counter market reported on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") on such date, or the last sale price reported on the NASDAQ National
Market System on such date, whichever is applicable, or, if no sale of the
common stock takes place on such date, the average of the closing high bid and
low asked price in the over-the-counter market reported on NASDAQ on such date
or the average of such prices reported on the NASDAQ National Market System on
such date, whichever is applicable. If there is no such last sale price or
closing high bid and low asked prices reported on such date, then the fair
market value per share shall be determined by the Board of Directors in
accordance with the regulations promulgated under Section 2031 of the Internal
Revenue Code of 1986, as amended, or by any appropriate method selected by the
Board of Directors. However, notwithstanding any provision of this agreement to
the contrary, in no event shall the total purchase price to be received by the
Estate of the Stockholder exceed the proceeds of life insurance, including
double indemnity in the event of accidental death, paid to the Company by
reason of the Stockholder's death under the policy or policies carried by the
Company on the life of the Stockholder under paragraph 3 hereof.
3. Insurance. The Company will, from the date of this agreement to the
date of Stockholder's death, except and to the extent otherwise consented or
agreed to by Stockholder, maintain in effect at all times the $1,150,000 of
life insurance for its benefit now carried on the life of the Stockholder to
provide to the Company on the death of the Stockholder available funds for the
purchase price of the Securities to be purchased by the Company hereunder.
A. Description of Policies. Notwithstanding any provision of this
Redemption Agreement to the contrary, the Stockholder and the Company
hereby agree that the $1,150,000 of life insurance maintained by the
Company under paragraph 3 hereof consists of Crown Life Insurance Company
Policy No. 1983892 in the amount of $400,000 and Sun Life Assurance
Company of Canada Policy No. UB8126194R in the amount of $750,000. All
references in the Redemption Agreement or any exhibit thereto to Phoenix
Mutual Life Insurance Co. Policy No. 2060237 in the amount of $1,150,000
and Sun Life Assurance
2
<PAGE>
Company of Canada Policy No. UB8126193V in the
amount of $2,000,000 are hereby deleted.
4. Priority for Application of Insurance Proceeds. The obligation of the
Company hereunder is subject to the following payments which will be the
priority for disbursement of the proceeds of the policies owned by the Company
on the life of the Stockholder:
A. To repay policy loans.
B. To the extent possible, to use the balance of such insurance
proceeds to redeem the stock of the Stockholder.
5. Limitations on Obligation of Company. The fulfillment of the
obligations of the Company herein is subject to the compliance with the
statutes of the state of incorporating of the Company, and the Company agrees
to take all appropriate steps to comply with applicable statutes.
6. Closing. Upon receipt by the Company of a written demand by the legal
representatives of the Estate of the Stockholder that the Company purchase the
Securities, the Company shall notify the legal representatives that such
purchase and sale of the Securities shall take place at a specified time and
place within 60 days after its receipt of such written demand at the principal
office of the Company or at such other time and place as is mutually agreed
upon by the Company and the legal representatives. At the closing of the
purchase and sale of the Securities, upon delivery to the Company by the legal
representatives of the Estate of the Stockholder of the Securities to be
redeemed in proper form, from and clear of all encumbrances, and duly endorsed
for transfer to the Company, the Company shall deliver to the representatives
the purchase price of such securities.
7. Notices. All notices and demands under this Agreement shall be in
writing, and if to the Company will be duly given if delivered by hand to an
officer, or if addressed and mailed by Certified Mail, return receipt
requested, to the Company at 508 West 5th Street, Charlotte, North Carolina
28202, or at such other address as the Company may hereafter designate by
notice, or, if to the Stockholder, will be duly given if delivery by hand by an
officer of the Company, or if addressed and mailed, by Certified Mail, return
receipt requested, to the Stockholder or to his legal representative at 8347
Providence Road, Charlotte, North Carolina 28277, or at such other address as
may appear as the home address of the Stockholder in the records of the
Company.
8. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors, and assigns, including but not
limited to any corporation or entity which may acquire all or substantially all
of the Company's assets
3
<PAGE>
and business or with or into which the Company may be
consolidated or merged. This Agreement shall inure to the benefit of and be
binding upon the Stockholder, his executors and administrators, but may not be
assigned by the Stockholder except to his executors and administrators.
9. Entire Agreement. This instrument contains the entire agreement of the
parties. It may not be amended or terminated orally, but may be amended only be
an agreement in writing signed by the parities. This Agreement will be governed
by the laws of the state of incorporation of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement pursuant to
authority duly given, this 14 day of September, 1994.
SPEIZMAN INDUSTRIES, INC.
[CORPORATE SEAL] Signature of Robert S. Speizman
ATTEST: By: [Signature]
President
[Signature of Josef Sklut]
[Signature]
[Signature] [SEAL]
Robert S. Speizman
1995 CONSOLIDATED AMENDMENT AGREEMENT TO
LOAN AGREEMENT AND RELATED DOCUMENTS
THIS AMENDMENT AGREEMENT, made and entered into as of this
31st day of May, 1995, by and between SPEIZMAN INDUSTRIES, INC.,
a Delaware corporation (the "Borrower") and NATIONSBANK, NATIONAL
ASSOCIATION (CAROLINAS), a national banking association (the
"Lender");
W I T N E S S E T H:
WHEREAS, pursuant to a Loan Agreement dated as of April 19,
1994 between the Borrower and the Lender (the "Loan Agreement"),
arrangements were made for the extension by the Lender to the
Borrower of credit on the terms and conditions thereof;
WHEREAS, under the Loan Agreement, the Borrower has issued
to the Lender its Revolving Credit Note dated April 19, 1994 in
the principal amount of $2,000,000 (the "Note");
WHEREAS, under the Loan Agreement, the Borrower has obtained
a letter of credit facility of up to $12,000,000 for the issuance
of documentary letters of credit for the purposes set forth in
the Loan Agreement (the "Letter of Credit Facility");
WHEREAS, collateral for the indebtedness and obligations of
the Borrower in respect of the Loan Agreement, Note and Letter of
Credit Facility is provided under a Security Agreement dated
April 19, 1994 (the "Security Agreement") between the Borrower
and the Lender;
WHEREAS, the Borrower has requested that the Lender increase
the Letter of Credit Facility from $12,000,000 to $14,000,000,
modify the Borrowing Base and extend the maturity date, all as
provided herein;
NOW, THEREFORE, in consideration of the premises and mutual
covenants and conditions herein set forth, it is hereby agreed as
follows:
<PAGE>
1. Terms. All terms used herein without definition,
unless the context clearly requires otherwise, shall have the
meanings provided therefor in the Loan Agreement.
2. Amendment to Loan Agreement.
(i) The number "$12,000,000" as it appears in the following
places in the Loan Agreement is hereby deleted and the number
"$14,000,000" placed in its stead:
(a) First paragraph on page 1 under WITNESSETH;
(b) Sections 1.51, 2.1, 3.1 and 3.5(iv).
(ii) The number "$5,000,000" as it appears in Section 1.10
"Borrowing Base" is hereby deleted and the number "$7,000,000"
placed in its stead and subparagraph (ii) of Section 1.10 is
hereby amended to read as follows:
"(ii) until August 31, 1995 the lesser of (x) Eligible
Inventory multiplied by 30% or (y) $750,000".
(iii) The date "October 31, 1995" in Section 1.52 "Letter
of Credit Facility Termination Date" and Section 1.73
"Termination Date" is hereby deleted and the date "October 31,
1996" placed in its stead.
(iv) The number "$2,500,000" as it appears in the ninth
line of Section 3.1 is hereby deleted and the number "$3,500,000"
placed in its stead.
(v) The Borrowing Base Certificate attached as Exhibit A to
the Loan Agreement is deleted and a new Borrowing Base
Certificate, in the form of Exhibit 1-A attached hereto, is
placed in its stead to be effective until August 31, 1995 and a
new Borrowing Base Certificate, in the form of Exhibit 1-B
attached hereto, is placed in its stead to be effective after
August 31, 1995.
3. Representations and Warranties. The Borrower hereby
represents and warrants that:
2
<PAGE>
(A) The representations and warranties contained in
Article V of the Loan Agreement are hereby made by the
Borrower on and as of the date hereof except the
representations of Sections 5.3 and 5.4 shall refer to the
most recent financial statements delivered under Section 7.1
of the Loan Agreement.
(B) There has been no change, and there exists no
prospective change, in the condition, financial or
otherwise, of the Borrower since the date of the most recent
financial reports received by the Lender, other than changes
in the ordinary course of business, none of which has been a
materially adverse change;
(C) The business and properties of the Borrower are
not, and since the date of the most recent financial reports
thereof received by Lender have not, been materially
adversely affected as the result of any fire, explosion,
earthquake, chemical spill, accident, strike, lockout,
combination of workmen, flood, embargo, riot, or
cancellation or loss of any major contracts;
(D) No event has occurred and no condition exists
which, either prior to or upon the consummation of the
transactions contemplated hereby, constitutes an Event of
Default under the Loan Agreement, either immediately or with
the lapse of time or the giving of notice, or both;
(E) The property which is collateral for the
indebtedness of the Borrower to the Lender under the
Security Agreement and other collateral documents of the
Borrower in favor of the Lender are subject to no liens or
encumbrances except Permitted Liens;
(F) The execution, delivery and performance by the
Borrower of its obligations under this Amendment Agreement
will not cause a violation or default under any indenture,
loan agreement, or other agreement of, or applicable to, the
Borrower; and
(G) The Borrower has the requisite corporate power and
authority to execute, deliver and perform this Amendment
3
<PAGE>
Agreement; each of such documents has been duly authorized,
executed and delivered; and each of such documents
constitutes a valid, binding and enforceable instrument,
obligation or agreement of the Borrower, in accordance with
its respective terms, except as enforcement thereof may be
limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting enforcement of
creditors' rights generally.
4. Effectiveness of Documents. The terms and conditions
hereof shall not be effective until each of the following are
delivered to the Lender:
(A) Amendment Agreement. Two fully executed originals
of this Amendment Agreement.
(B) Resolutions of Borrower. Resolutions of the
Borrower certified by its secretary or assistant secretary
as of the date hereof, approving and adopting this Amendment
Agreement and the other documents to be executed by the
Borrower.
(C) Opinions. An opinion of counsel to the Borrower
covering the matters covered by its prior opinion on the
Loan Agreement.
(D) Uniform Commercial Code Financing Statements.
Uniform Commercial Code Financing Statements covering the
property described in the Security Agreement.
(E) Charter Documents. Copy of a Good Standing
Certificate of the State of Delaware concerning Borrower and
the Articles of Incorporation of Borrower certified by the
Secretary of State of Delaware to be a true and correct copy
as currently in effect and a copy of the Bylaws certified by
the Secretary of the Borrower to be a true and correct copy
as currently in effect.
(F) Certificate of Authority. Certificate of a recent
date of the Secretary of State of North Carolina as to the
authority of the Borrower to do business in North Carolina
and the good standing of the Borrower.
4
<PAGE>
(G) No Litigation Certificate. Certificate of the
chief financial officer of the Borrower to the effect that
no litigation or proceedings are pending or threatened which
might reasonably be expected to adversely affect the
Borrower's ability to perform its obligations under this
Agreement or operation of the Borrower's business.
(H) Amendment Fee. An amendment fee of $5,000 payable
by Borrower.
(I) Other Documents, Etc. Such other documents,
instruments and certificates as the Lender may reasonably
request.
5. Miscellaneous.
(A) This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in
relation to the subject matter hereof and supersedes any
prior negotiations and agreements among the parties relative
to such subject matter. No promise, condition,
representation or warranty, express or implied, not herein
set forth shall bind any party hereto, and none of them has
relied on any such promise, condition, representation or
warranty. Each of the parties hereto acknowledges that,
except as in this Amendment Agreement otherwise expressly
stated, no representations, warranties, or commitments,
express or implied, have been made by any other party to the
other regarding the subject matter hereof. None of the
terms or conditions of this Amendment Agreement may be
changed, modified, waived or canceled, orally or otherwise,
except in a writing, signed by the party to be charged
therewith, specifying such change, modification, waiver or
cancellation of such terms or conditions, or of any
preceding or succeeding breach thereof, unless expressly so
stated.
(B) Except as hereby specifically amended, modified,
or supplemented, the Loan Agreement, the Loan Documents and
all other agreements, documents, and instruments related
thereto are hereby confirmed and ratified in all respects
5
<PAGE>
and shall remain in full force and effect according to their
respective terms.
(C) This Amendment Agreement may be executed in any
number of counterparts, each of which shall be deemed to be
an original as against any party whose signature appears
thereon, and all of which together shall constitute one and
the same instrument.
(D) This Amendment Agreement shall be governed by and
construed and interpreted in accordance with the laws of the
State of North Carolina.
(E) Upon request of the Lender, each of the parties
hereto will duly execute and deliver or cause to be duly
executed and delivered to the Lender such further
instruments and do and cause to be done such further acts
that may be reasonably necessary or proper in the opinion of
the Lender to carry out more effectively the provisions and
purposes hereof, including documents deemed necessary by the
Lender to more fully evidence the obligations of Borrower to
Lender and protect and perfect the collateral therefor.
(F) The Borrower agrees to pay all reasonable costs
and expenses of the Lender in connection with the
preparation, execution and delivery of the documents
executed in connection with this Amendment Agreement,
including without limitation, the reasonable fees and
out-of-pocket expenses of special counsel to the Lender.
[Signatures appear on following page]
6
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date hereof by the Company and the Lender.
ATTEST: SPEIZMAN INDUSTRIES, INC.
R.A. Bigger (sig) By: Josef Sklut (sig)
Assistant Secretary Name: Josef Sklut
Title: Vice President - Finance
NATIONSBANK, NATIONAL ASSOCIATION
(CAROLINAS)
By: John R. Clemens (sig)
Name: John R. Clemens
Title: SVP
7
<PAGE>
EXHIBIT 1-A
(Prior to August 31, 1995)
BORROWING BASE CERTIFICATE
<TABLE>
<CAPTION>
Speizman Industries, Inc.
Borrowing Base Certificate For the Week Ended
<S> <C> <C>
I. Accounts Receivable Gross Receivables $0
Less: Amounts over 90 days $0
from invoice
Less: Commissions and expenses $0
receivable
Less: Foreign accounts receivable $0
Less: Accounts receivable of an $0
account debtor for which more
than 25% of its total balance
is more than 90 days past due
Less: Other ineligible accounts $0
receivable including
"consigned inventories"
Net Eligible Receivables $0
A/R Availability (A) 80.00% $0
II. Inventories Gross Inventories $0
Less: Work in process, Supplies, $0
etc.
Less: Other ineligible $0
inventories
Net Eligible Inventories $0
Inventory Availability (B) 30.00% $0
(Limit $750,000)
Plus: Outstanding Documentary $0
L/C's
L/C Availability (C) 50.00% $0
L/C + Inventory Avail. (D) (B)+(C) $0
8
<PAGE>
(Limit $7,000,000)
III. Cash Collateral (E) Certificates of Deposit Pledged $0
to Lender
IV. Calculation of A/R Availability (A) $0
Total Borrowing L/C+Inventory Availability (D) $0
Base Availability Cash Collateral (E) $0
(F) Total Borrowing Base Availability $0
Credit Facility Usage:
Direct Borrowings $0
O/S Documentary L/C's $0
(G) Total Usage $0
Net Excess (F-G) $0
</TABLE>
The aggregate face amount of letters of credit outstanding
in respect of textile machinery held as inventory for sale
does not exceed $3,500,000.
9
<PAGE>
EXHIBIT 1-B
BORROWING BASE CERTIFICATE
<TABLE>
<CAPTION>
Speizman Industries, Inc.
Borrowing Base Certificate For the Week Ended
<S> <C> <C>
I. Accounts Receivable Gross Receivables $0
Less: Amounts over 90 days $0
from invoice
Less: Commissions and expenses $0
receivable
Less: Foreign accounts receivable $0
Less: Accounts receivable of an $0
account debtor for which more
than 25% of its total balance
is more than 90 days past due
Less: Other ineligible accounts $0
receivable including
"consigned inventories"
Net Eligible Receivables $0
A/R Availability (A) 80.00% $0
II. L/C Availability (B) 50.00% $0
(Limit $7,000,000)
III. Cash Collateral (C) Certificates of Deposit Pledged $0
to Lender
IV. Calculation of A/R Availability (A) $0
Total Borrowing L/C Availability (B) $0
Base Availability Cash Collateral (C) $0
(D) Total Borrowing Base Availability $0
Credit Facility Usage:
Direct Borrowings $0
O/S Documentary L/C's $0
(E) Total Usage $0
Net Excess (D-E) $0
</TABLE>
The aggregate face amount of letters of credit outstanding
in respect of textile machinery held as inventory for sale
does not exceed $3,500,000.
10
<PAGE>
Exhibit 11
NET INCOME PER SHARE
The following table presents the information needed to compute primary
income per common share:
Year Ended
July 1, July 2, July 3,
1995 1994 1993
Net income applicable to common stock $1,293,815 $3,256,091 $2,418,756
Weighted average shares outstanding 3,236,199 2,826,279 1,996,081
Less: Treasury shares (27,600) (27,600) (27,600)
Add: Assumed conversion of Senior
Preferred Stock - - 240,766
Add: Exercise of options reduced by the number of
shares purchased with proceeds 62,865 105,846 150,507
Adjusted weighted average shares
outstanding 3,271,464 2,904,525 2,359,754
Net income per share $ 0.40 $ 1.12 $ 1.03
<PAGE>
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statements No. 2-77747 and No. 33-43042 of Speizman Industries, Inc. on
Form S-8 of our report dated September 1, 1995, appearing in this Annual
Report on Form 10-K of Speizman Industries, Inc. for the year ended
July 1, 1995.
BDO SEIDMAN
Charlotte, North Carolina
September 1, 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-01-1995
<PERIOD-START> JUL-03-1994
<PERIOD-END> JUL-01-1995
<CASH> 2,436,859
<SECURITIES> 0
<RECEIVABLES> 16,275,841
<ALLOWANCES> 207,158
<INVENTORY> 13,428,014
<CURRENT-ASSETS> 34,401,911
<PP&E> 2,254,626
<DEPRECIATION> 1,440,688
<TOTAL-ASSETS> 35,704,458
<CURRENT-LIABILITIES> 16,788,884
<BONDS> 0
<COMMON> 323,620
0
0
<OTHER-SE> 18,455,325
<TOTAL-LIABILITY-AND-EQUITY> 35,704,458
<SALES> 61,596,833
<TOTAL-REVENUES> 61,596,833
<CGS> 53,986,242
<TOTAL-COSTS> 59,463,876
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (14,858)
<INCOME-PRETAX> 2,147,815
<INCOME-TAX> 854,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,293,815
<EPS-PRIMARY> 0.40
<EPS-DILUTED> 0.40
</TABLE>
