UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d)OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal quarter ended June 26, 1998
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 0-25246
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WINSLOEW FURNITURE, INC.
(Exact name of registrant as specified in its charter)
FLORIDA 63-1127982
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
201 CAHABA VALLEY PARKWAY, PELHAM, ALABAMA 35124
- -----------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(205) 403-0206
--------------
(Registrant's telephone number, including Area Code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X . No
------ -----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
Class Shares Outstanding at July 24, 1998
- --------------- -----------------------------------
$ .01 par value 7,509,20
WINSLOEW FURNITURE, INC.
INDEX
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements ......................... 3
Consolidated Balance Sheets .................. 4
Consolidated Statements of Income ............ 4
Consolidated Statements of Cash Flows ........ 5
Notes to Consolidated Financial Statements . 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations ................................ 8-12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ........................... 12
Item 4. Submission of Matters to a Vote of
Security Holders ............................ 12
Item 6. Exhibits and Reports on Form 8-K ............ 12
Signatures ............................................. 13
2
WinsLoew Furniture, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(In thousands except share
and per share amounts) June 26, December 31,
1998 1997
--------- -----------
Assets
Cash and cash equivalents $ 3,666 $ 707
Accounts receivable, less
allowances for doubtful accounts 21,356 21,124
Inventories 9,585 9,096
Prepaid expenses and other
current assets 4,695 7,391
Net assets of discontinued operations 2,199 2,057
------- --------
Total current assets 41,501 40,375
Net assets of discontinued operations 6,471 6,860
Property, plant and equipment, net 10,258 10,320
Goodwill, net 20,681 21,021
Other assets 1,274 763
------- -------
$80,185 $79,339
======= =======
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 515 $ 515
Accounts payable 5,198 3,187
Other accrued liabilities 12,956 7,336
------- -------
Total current liabilities 18,669 11,038
Long-term debt, net of current portion 2,455 15,908
Deferred income taxes 745 1,367
------- -------
Total liabilities 21,869 28,313
------- -------
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $.01
per share, 5,000,000 shares
authorized, none issued -- --
Common stock; par value $.01
per share, 20,000,000 shares
authorized, 7,542,258 and 7,526,508
shares issued and outstanding at
March 27, 1998 and December 31, 1997 75 75
Additional paid-in capital 23,446 24,926
Retained earnings 34,795 26,025
------- -------
Total stockholders' equity 58,316 51,026
------- -------
$80,185 $79,339
======= =======
See accompanying notes.
3
WinsLoew Furniture, Inc and Subsidiaries
Consolidated Statements of Income
(Unaudited)
(In thousands except
per share amounts)
Seconded Quarter Ended Six Months Ended
----------------------- --------------------
June 26, June 27, June 26, June 27,
1998 1997 1998 1997
--------- --------- --------- ---------
Net sales $39,799 $37,524 $64,927 $60,660
Cost of sales 23,690 23,013 39,694 38,796
-------- -------- -------- --------
Gross profit 16,109 14,511 25,233 21,864
Selling, general
and administrative
expenses 5,863 6,220 10,076 10,662
Amortization 243 244 487 488
-------- -------- -------- --------
Operating income 10,003 8,047 14,670 10,714
Interest expense 354 645 687 1,502
-------- -------- -------- --------
Income from
continuing
operations before
income taxes 9,649 7,402 13,983 9,212
Provision for
income taxes 3,624 2,837 5,213 3,554
------- -------- -------- --------
Income from continuing
operations 6,025 4,565 8,770 5,658
(Loss) from
discontinued
operations, net
of taxes -- (61) -- (336)
------- -------- -------- --------
Net income $6,025 $4,504 $8,770 $5,322
======= ======= ======= =======
Basic earnings (loss) per share:
Income from continuing
operations $0.80 $0.61 $1.17 $0.76
(Loss) from
discontinued
operations, net
of taxes -- (0.01) -- (0.05)
----- ------ ----- -----
Net income $0.80 $0.60 $1.17 $0.71
===== ====== ===== =====
Weighted average
number of shares 7,513 7,456 7,526 7,449
===== ===== ===== =====
Diluted earnings (loss) per share:
Income from continuing
operations $0.78 $0.61 $1.14 $0.75
(Loss) from
discontinued
operations,
net of taxes -- (0.01) -- (0.04)
----- ------ ----- -----
Net income $0.78 $0.60 $1.14 $0.71
===== ====== ===== =====
Weighted average
number of shares
and common stock
equivalents 7,722 7,502 7,716 7,498
===== ====== ===== =====
See accompanying notes.
4
WinsLoew Furniture, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands) For the Six Months Ended
-------------------------
June 26, June 27,
1998 1997
--------- ---------
Cash flows from operating activities:
Net income $8,770 $5,322
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Depreciation and amortization 1,048 1,135
Provision for losses on accounts
receivable 399 65
Change in net assets held for sale 247 1,247
Changes in operating assets and
liabilities, net of effects
from acquisitions and dispositions:
Accounts receivable (631) 2,071
Inventories (489) 364
Prepaid expenses and other
current assets 2,696 (40)
Other assets (658) (2)
Accounts payable 2,011 2,166
Other accrued liabilities 5,620 4,099
Deferred income taxes (622) 85
------- -------
Total adjustments 9,621 11,190
------- -------
Net cash provided by (used in)
operating activities 18,391 16,512
------- -------
Cash flows from investing activities:
Capital expenditures, net of disposals (499) (465)
------- -------
Net cash (used in) investing activities (499) (465)
-------- -------
Cash flows from financing activities:
Net borrowings (payments) under
revolving credit agreements (13,453) (14,809)
Proceeds from issuance of
common stock, net 610 193
Payments on long-term debt -- (870)
Repurchase and cancellation of stock (2,090) (490)
-------- -------
Net cash provided by financing
activities (14,933) (15,976)
-------- -------
Net increase in cash and
cash equivalents 2,959 71
Cash and cash equivalents at
beginning of year 707 897
------ -------
Cash and cash equivalents at
end of period $3,666 $ 968
====== =======
Supplemental disclosures:
Interest paid $245 $775
Income taxes paid $1,644 $1,573
====== =======
See accompanying notes
5
WINSLOEW FURNITURE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements of
WinsLoew Furniture, Inc. and subsidiaries (the "Company" or
"WinsLoew"), which are for interim periods, do not include all
disclosures provided in the annual consolidated financial
statements. These unaudited consolidated financial statements
should be read in conjunction with the annual consolidated
financial statements and notes thereto contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997,
as filed with the Securities and Exchange Commission.
All material intercompany balances and transactions have been
eliminated. The preparation of the consolidated financial
statements requires the use of estimates in the amounts reported.
In the opinion of the Company, the accompanying unaudited
consolidated financial statements contain all adjustments (which
are of a normal recurring nature) necessary for a fair
presentation of the results for the interim periods. The results
of operations are presented for the Company's second quarter,
which is from March 28 through June 26, 1998, and for the six
month period which is from January 1 through June 26, 1998. The
results of operations for these two periods are not necessarily
indicative of the results to be expected for the full year.
2. Inventories
Inventories consisted of the following:
(In thousands)
June 26, December 31,
1998 1997
----------- ------------
Raw materials $7,948 $7,597
Work in process 539 1,038
Finished goods 1,098 461
----------- ------------
$9,585 $9,096
=========== ============
3. Long-term Debt
WinsLoew's amended senior credit facility provides the Company
with a variable amount available under the revolving line of
credit. The amount available under its revolving credit line is
$20 million between July 1 each year through December 31. The
Company may, at its option, elect to increase the revolving
credit line at January 1 to a maximum of $40 million. For the
period January 1, 1998 through June 30, 1998, the Company's
maximum revolver is $25 million.
4. Capital Stock
In January 1998, WinsLoew's Board of Directors approved a plan to
acquire up to 1,000,000 shares of the common stock. To date in
1998, the Company has acquired 75,000 shares for $2.1 million.
The purchases have been funded from the Company's credit facility
(see Note 3 above).
6
5. Discontinued Operations
During 1997 the Company's Board of directors adopted a plan to
discontinue the Company's ready-to-assemble ("RTA") operations.
Of the three business, one is in the process of being liquidated
and two business were being held for sale (See Note 6-Subsequent
Events). The results of operations have been classified in the
accompanying statement of income as discontinued operations.
Revenues from discontinued operations were $5,307,000 and
$6,655,000 in the second quarter of 1998 and 1997 and $9,973,000
and $12,995,000 for the year to date periods ended June 26, 1998
and June 27, 1997, respectively.
The current net assets of discontinued operations consist of
inventory and receivables, net of current liabilities including
the reserve for estimated losses through the disposal date. The
non-current assets of discontinued operations consist of
property, plant and equipment and goodwill.
6. Subsequent Events
Subsequent to the end of the quarter, the Company entered into an
agreement to sell its Continental Engineering Group, Inc.
("Continental") subsidiary for approximately $7.9 million.
Continental was one of the RTA businesses being held for sale
(See Note 5). The proceeds were used to reduce outstanding
indebtedness under the Company's senior credit facility.
Subsequent to the end of the quarter, the Company purchased the
stock of Tropic Craft, Inc., a company involved in the design and
manufacture of casual furniture for the contract market. The
purchase price of approximately $9.9 million was financed under
the Company's senior credit facility.
7
Management's Discussion and Analysis of Financial Condition
and Results of Operations
General
WinsLoew is engaged in the design, manufacture, and distribution
of casual furniture and contract seating furniture. WinsLoew's
casual furniture products are distributed through independent
manufacturer's representatives and are constructed of extruded
and tubular aluminum, wrought iron and cast aluminum. These
products are distributed through fine patio stores, department
stores, and full line furniture stores nationwide. WinsLoew's
contract seating products are distributed to a broad customer
base which includes architectural design firms, restaurants and
lodging chains.
Results of Operations
The following table sets forth net sales, gross profit, and gross
margin as a percent of net sales for the respective periods for
each of the Company's product lines (in thousands, except for
percentages):
Three Months Ended
------------------------------------------------
June 26, 1998 June 27, 1997
------------------------ -----------------------
Net Gross Gross Net Gross Gross
Sales Profit Margin Sales Profit Margin
------- ------- ------ ------- ------ ------
Casual furniture $21,895 $10,362 47.3% $22,404 $9,878 44.1%
Contract seating 17,904 5,747 32.1% 15,120 4,633 30.6%
------- ------- ------- ------
Total $39,799 $16,109 40.5% $37,524 $14,511 38.7%
Six Months Ended
-------------------------------------------------
June 26, 1998 June 27, 1997
------------------------ ------------------------
Net Gross Gross Net Gross Gross
Sales Profit Margin Sales Profit Margin
------- ------- ------ ------- ------ ------
Casual furniture $31,525 $14,716 46.7% $31,858 $13,878 42.4%
Contract seating 33,402 10,517 31.5% 28,802 8,368 29.1%
------- ------- ------- ------
Total $64,927 $25,233 38.9% $60,660 $21,864 36.0%
8
The following table sets forth certain information relating to
the Company's operations expressed as a percentage of the
Company's net sales:
Three Months Ended Six Months Ended
------------------ -------------------
June 26, June 27, June 26, June 27,
1998 1997 1998 1997
-------- -------- -------- --------
Gross margin 40.5% 38.7% 38.9% 36.0%
Selling, general and
administrative expense 14.7% 16.6% 15.5% 17.6%
Amortization 0.6% 0.7% 0.8% 0.8%
Operating income 25.1% 21.4% 22.6% 17.7%
Interest expense, net 0.9% 1.7% 1.1% 2.5%
Income from continuing
operations before
income taxes 24.2% 19.7% 21.5% 15.2%
Income from continuing
operations 15.1% 12.2% 13.5% 9.3%
Comparison of Second Quarters Ended June 26, 1998 and June 27,
1997
Net Sales: WinsLoew's consolidated net sales for the second
quarter of 1998 increased $2.3 million or 6.1%, to $39.8 million
from $37.5 million in the second quarter of 1998. If the casual
wrought iron business, sold in August 1997, is excluded in the
second quarter of 1997, consolidated net sales increased $5.5
million or 15.9%.
Both of the Company's product lines experienced strong sales
increases. Sales of casual products increased 13.9%, after
excluding 1997 quarter sales for the wrought iron business sold
in August 1997, in the second quarter of 1998. The Company
believes that due to its high quality, innovative designs and the
Company's delivery program, existing retail customers have
allocated more floor space, and are, therefore, requiring larger
inventories of the Company's casual aluminum furniture. Contract
Seating product sales increased 18.4% due to both core business
and increased demand in the lodging industry.
Gross Margin: Consolidated gross margin increased to 40.5% in
the second quarter of 1998, compared to 38.7% in the second
quarter of 1997. Both of the Company's product lines experienced
increases in gross margin. The Casual product line had improved
gross margins in the second quarter of 1997, due to the sale in
August 1997 of the wrought iron business and improved operating
efficiencies and lower raw material costs in the remaining
facilities. The gross margin for contract seating products
improved due to higher volume and improved efficiencies in both
of the Company's facilities.
Selling, General and Administrative Expenses: Selling, general
and administrative expenses decreased $0.4 million from the
second quarter of 1998, due to decreases in selling, general and
administrative expenses as a result of cost reduction programs.
Operating Income: As a result of the above, operating income
increased by $2.0 million, to $10.0 million (25.1% of net sales)
in the second quarter of 1998 compared to $8.0 million (21.4% of
net sales) in the second quarter of 1997. These expenses
decreased to 14.7% of net sales as the Company continues to
leverage these costs against increases in revenue.
Interest Expense: The Company's interest expense decreased
$291,000 in the second quarter of 1998, compared to the second
quarter of 1997, due to lower outstanding debt balances.
Provision for Income Taxes: The Company's effective tax rate for
the 1998 second quarter was 37.7% compared to 38.3% for the 1997
second quarter. This is greater than the Federal statutory rate
due to the effect of state income taxes and non-deductible
goodwill amortization.
9
Comparison of Six Months Ended June 26, 1998 and
June 27, 1997
Net Sales: WinsLoew's consolidated net sales for the first six
months of 1998 increased $4.3 million or 7.0%, to $64.9 million
from $60.7 million in the first six months of 1997. If the
casual wrought iron business, sold in August 1997, is
excluded from the year to date period in 1997, consolidated net
sales increased $9.1 million or 16.2%.
Both of the Company's product lines experienced strong sales
increases. The Casual product line increased sales by 16.4%,
after excluding sales in the 1997 period of the casual wrought
iron business sold in August 1997. The Company believes that due
to its high quality, innovative designs, and delivery program,
existing retail customers have allocated more floor space, and
are, therefore, requiring larger inventories of the Company's
casual aluminum furniture. The Contract Seating product line
experienced a sales increase of 16.0% as both core business and
the lodging industry increased demand.
Gross Margin: Consolidated gross margin increased to 38.9% in
the first six months of 1998, compared to 36.0% in the first six
months of 1997. Both product lines showed improved gross
margins. The Casual product line had improved gross margins in
the first six months of 1997, due to the sale of the casual
wrought iron business, greater operating efficiencies from
increased sales volumes and favorable raw material costs. The
contract seating business experienced improved gross margin due
to increased sales volume and improved operating efficiencies.
Selling, General and Administrative Expenses: Selling, general
and administrative expenses decreased from the first six months
of 1997 by $586,000 for the first six months of 1998, primarily
due to the Company's ongoing cost reduction programs.
Operating Income: As a result of the above, operating income
increased by $4.0 million to $14.7 million (22.6% of net sales)
in the first six months of 1998, compared to $10.7 million (17.7%
of net sales) in the first six months of 1997.
Interest Expense: The Company's interest expense decreased
$815,000 in the first six months of 1998, compared to the same
period in 1997 due to lower outstanding debt balances.
Provision for Income Taxes: The Company's 1998 effective tax
rate of 37.4% and effective rate of 38.6% for the 1997 period is
greater than the federal statutory rate due to the effect of
state income taxes and non-deductible goodwill amortization.
Seasonality and Quarterly Information
The furniture industry is cyclical and sensitive to changes in
general economic conditions, consumer confidence, discretionary
income, interest rate levels, and credit availability.
Sales of Casual products are typically higher in the second and
fourth quarters of each year, primarily as a result of: (1) high
retail demand for casual furniture in the second quarter,
preceding the summer months, and (2) the impact of special sales
programs on fourth quarter sales. The Company's Casual product
sales will also be affected by weather conditions during the peak
retail selling season with a resulting impact on consumer
purchases of outdoor furniture products.
The results of operations for any interim quarter are not
necessarily indicative of results for a full year.
10
Liquidity and Capital Resources
The WinsLoew's short-term cash needs are primarily for working
capital to support its debt service, accounts receivable, and
inventory requirements. The Company has historically financed
its short-term liquidity needs with internally generated funds
and revolving credit facility borrowings. The Company actively
monitors its cash balances and applies available funds to reduce
borrowings under its long-term revolving line of credit. At June
26, 1998, the Company has $22.8 million of working capital and
$22.8 million of unused and available funds under its credit
facilities ($20.0 million of unused and available funds on July
1, 1998 after giving effect to the reduction discussed in Note
2).
In May 1998, WinsLoew amended its senior credit facility to allow
the Company to borrow under its credit facility to purchase
shares of the Company's common stock (see Note 4 to the
Consolidated Financial Statements). As of June 26, 1998 there
was $10 million available for such repurchases.
Cash Flows From Operating Activities: For the first six months
of 1998, cash provided by operating activities was $18.4 million,
compared to cash provided of $16.5 million in the first six
months of 1997. During the first four months of each year,
accounts receivable in the Casual Furniture division normally
increase due to extended payment terms offered to customers.
During the second quarter, the Company receives payment on these
accounts receivable. Also, the improvement in cash provided by
operations in the first six months of 1998 compared to
1997benefited from the overall improvement in profits.
Cash Flows From Investing Activities: WinsLoew's net cash used
in investing activities was $499,000 during the first six months
of 1998 compared to $465,000 in 1997.
Cash Flows From Financing Activities: Net cash used in financing
activities was $14.9 million in the first six months of 1998
compared to $16.0 million in the first six months of 1997. The
Company retired 75,000 shares at a cost of $2.1 million (see Note
4 to the Consolidated Financial Statements).
At June 26, 1998, the Company has no material commitments for
capital expenditures.
Foreign Exchange Forward Contracts
WinsLoew purchases some raw materials from several Italian
suppliers. These purchases expose the Company to the effects of
fluctuations in the value of the U.S. dollar versus the Italian
lira. If the U.S. dollar declines in value versus the Italian
lira, the Company will pay more in U.S. dollars for these
purchases. To reduce its exposure to loss from such potential
foreign exchange fluctuations, the Company will occasionally
enter into foreign exchange forward contracts. These contracts
allow the Company to buy Italian lira at a predetermined exchange
rate and thereby transfer the risk of subsequent exchange rate
fluctuations to a third party. However, if the Company is unable
to continue such forward contract activities and the Company's
inventories increase in connection with expanding sales
activities, a weakening of the U.S. dollar against the Italian
lira could result in reduced gross margins. The Company elected
to hedge a portion of its exposure to purchases made in 1998 by
entering into foreign currency forward contracts with a value of
$1.9 million, all of which is outstanding and unsettled at June
26, 1998, maturing at approximately $272,000 per month. The
Company did not incur significant gains or losses from these
foreign currency transactions.
11
Year 2000
The Company began an assessment of Year 2000 issues on its
computer system in mid 1995 and began the process of updating
hardware and software at each of its facilities. This process is
now complete. Subsequent to quarter end, one of the Company's
discontinued operations had been sold. The Company is in the
process of reviewing the requirements of the computer system at
its recent acquisition. From an ongoing cost standpoint, Year
2000 issues are not expected to have a significant impact on the
Company's financial position, results of operations or liquidity.
Part II. Other Information
Item 1. Legal Proceedings
The Company is, from time to time, involved in routine
litigation. No such routine litigation in which the Company is
presently involved is material to its financial position, results
of operations, or liquidity.
Item 4. Submission of Matters to a Vote of Security
Holders
(a) The Registrant held its Annual Meeting of
Shareholders on June 2, 1998.
(b) Not applicable
(c) The only matter voted on at the Annual
Meeting of Shareholders was the election of
Class II directors and the tabulation of
votes is as follows:
Broker
Name For Withheld Non-Votes
-------------------------------------------------------
William H. Allen, Jr. 6,928,707 4,163 0
Earl W. Powell 6,928,707 4,163 0
James S. Smith 6,928,707 4,163 0
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 10.21 - Eighth Amendment to Credit
Agreement, dated May 22, 1998, between the
Registrant, its subsidiaries and Heller Financial,
Inc.
Exhibit 27 - Financial Data Schedule
(b)Reports on Form 8-K-None.
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
WINSLOEW FURNITURE, INC.
/s/ Bobby Tesney
----------------
July 24, 1998 BOBBY TESNEY
President and
Chief Executive Officer
/s/ Vincent A. Tortorici, Jr.
-----------------------------
July 24, 1998 VINCENT A. TORTORICI, Jr.
Chief Financial Officer
13
Exhibit 10.21
EIGHTH AMENDMENT TO CREDIT AGREEMENT
This EIGHTH AMENDMENT TO CREDIT AGREEMENT ("Amendment") is
made and entered into this 22nd day of May, 1998 by and among
WINSLOEW FURNITURE, INC., a Florida corporation ("WinsLoew"),
LOEWENSTEIN, INC., a Florida corporation ("Loewenstein"), WINSTON
FURNITURE COMPANY OF ALABAMA, INC., an Alabama corporation
("Winston"), TEXACRAFT, INC., a Texas corporation ("Texacraft"),
and CONTINENTAL ENGINEERING GROUP,INC., a California corporation
("Continental") (WinsLoew, Loewenstein, Winston Texacraft and
Continental being hereinafter referred to collectively as
"Borrowers" and individually as a "Borrower"), HELLER FINANCIAL,
INC., in its capacity as Agent for the Lenders party to the
Credit Agreement described below ("Agent"), and the Lenders which
are signatories hereto.
WHEREAS, Agent, Lenders and Borrower are parties to a certain
Credit Agreement dated February 2, 1995 and all amendments
thereto (as such agreement has from time to time been amended,
supplemented or otherwise modified, the "Agreement"); and
WHEREAS, the parties desire to amend the Agreement as hereinafter
set forth;
NOW THEREFORE, in consideration of the mutual conditions and
agreements set forth in the Agreement and this Amendment, and
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Definitions. Capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such
term in the Agreement.
2. Amendments. Subject to the conditions set forth below, the
Agreement is amended as follows:
(a) Subsection 1.1 is amended by inserting the following
definition in its appropriate place:
"Eighth Amendment Effective Date" means May 22, 1998"
(b) Subsection 7.5(d) is amended by deleting clause (B) in its
entirety and inserting the following in lieu thereof:
"(B) after the Eighth Amendment Effective Date the aggregate
amount of such capital stock purchased during the term of this
Agreement does not exceed $10,000,000,"
(c) Subsection 7.5(d) is further amended by deleting clause (D)
in such subsection in its entirety and inserting a period at the
end of clause (C).
3. Conditions. The effectiveness of this Amendment is subject to
the following conditions precedent (unless specifically waived in
writing by Agent):
(a) Borrower shall have executed and delivered this Amendment,
and such other documents and instruments as Agent may require
shall have been executed and/or delivered to Agent;
(b) All proceedings taken in connection with the transactions
contemplated by this Amendment and all documents, instruments and
other legal matters incident thereto shall be satisfactory to
Agent and its legal counsel; and
(c) No Default or Event 0f Default shall have occurred and be
continuing.
4. Representations and Warranties. To induce Agent and Lenders
to enter into this Amendment, Borrower represents and warrants to
Agent and Lenders that (a) the execution, delivery and
performance of this Amendment has been duly authorized by all
requisite corporate action on the part of Borrower and
that this Amendment has been duly executed and delivered by
Borrower and (b) each of the representations and warranties set
forth in Section 4 of the Agreement (other than those which, by
their terms? specifically are made as of certain date
prior to the date hereof) are tine and correct in all material
respects as of the date hereof.
5. Severability Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall
not impair or invalidate the remainder of this Amendment and the
effect thereof shall be confined to the provision so held to be
invalid or unenforceable.
6. References. Any reference to the Agreement contained in any
document, instrument or agreement executed in connection with the
Agreement shall be deemed to be a reference to the Agreement as
modified by this Amendment.
7. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all
of which taken together shall be one and the same instrument.
8. Ratification. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and
provisions of the Agreement and shall not be deemed to be a
consent to the modification or waiver of any other term or
condition of the Agreement. Except as expressly modified and
superseded by this Amendment, the terms and provisions of the
Agreement are ratified and confirmed and shall continue in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed under seal and delivered by their respective
duly authorized officers on the date first written above
HELLER FINANCIAL, INC., WINSLOEW FURNITURE, INC.
as Agent and Lender LOEWENSTEIN, INC.
By:/s/ Scott Gast WINSTON FURNITURE COMPANY
Scott Gast OF ALABAMA, INC.
Title: Assistant VP CONTINENTAL ENGINEERING GROUP, INC
TEXACRAFT, INC., in its capacity
as Borrower and as a Guarantor
acknowledging the terms of this
Agreement
By:/s/ Vincent Tortorici, Jr.
--------------------------
Vincent Tortorici, Jr.
Title: Vice President and CFO
THE FIRST NATIONAL BANK
OF BOSTON
By: /s/Lauren P. Carrigan
---------------------
Lauren P. Carrigan
Title: Vice President
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as
successor by merger to
Bank of America Illinois
By: /s/Elieen L. Sachanda
---------------------
Elieen L. Sachanda
Title: Vice President
ABN AMRO BANK N.V.
By: /s/Richard Lavina
-----------------
Richard Lavina
Title: Group Vice President
[ARTICLE] 5
[MULTIPLIER] 1000
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] JUN-26-1998
[CASH] 3,666
[SECURITIES] 0
[RECEIVABLES] 21,356
[ALLOWANCES] 0
[INVENTORY] 9,585
[CURRENT-ASSETS] 41,501
[PP&E] 10,258
[DEPRECIATION] 0
[TOTAL-ASSETS] 80,185
[CURRENT-LIABILITIES] 18,669
[BONDS] 0
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[COMMON] 75
[OTHER-SE] 58,241
[TOTAL-LIABILITY-AND-EQUITY] 80,185
[SALES] 39,799
[TOTAL-REVENUES] 39,799
[CGS] 23,690
[TOTAL-COSTS] 29,796
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 354
[INCOME-PRETAX] 9,649
[INCOME-TAX] 3,624
[INCOME-CONTINUING] 6,025
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 6,025
[EPS-PRIMARY] .80
[EPS-DILUTED] .78
</TABLE>