FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended November 3, 1995
[ ] 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 Number 1-6797
TEXFI INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
Delaware 56-0795032
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5400 Glenwood Avenue, Suite 215, Raleigh, NC 27612
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (919) 783-4736
--------------
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- --------------------
Common Stock, par value $1.00 per share New York Stock Exchange, Inc.
- --------------------------------------- -----------------------------
11-1/4% Convertible Senior Subordinated
Debentures due October 1, 1997 New York Stock Exchange, Inc.
- --------------------------------------- -----------------------------
8-3/4% Senior Subordinated Debentures
due August 1, 1999 New York Stock Exchange, Inc.
- --------------------------------------- -----------------------------
Securities registered pursuant to Section 12(g) of the Act: None
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 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 to this
Form 10-K. [ ]
Aggregate market value of voting stock held by persons other than officers,
directors and related stockholders as of January 12, 1996: 18,566,382.
Number of shares of Common Stock outstanding at January 12, 1996: 8,650,690.
Documents incorporated by reference:
Portions of the definitive proxy statement for the Annual Meeting of
Stockholders to be held on March 12, 1996 are Incorporated by Reference into
Part III.
<PAGE>
PART I
Item 1. Business.
Texfi Industries, Inc. ("the Company") was incorporated in Delaware in
1963. The Company manufactures and markets a diverse line of textile and apparel
products from a variety of raw materials, including natural and synthetic
materials. The Company's offices are located at 5400 Glenwood Avenue, Suite 215,
Raleigh, North Carolina 27612, telephone (919) 783-4736.
The Company's operations include three divisions: Texfi Blends, Texfi
Narrow Fabrics, and Kingstree Knit Apparel. The following discusses each of the
Company's three operating divisions and how they contributed to the Company's
consolidated 1995 operating performance.
The Texfi Blends Division is the Company's largest division operating three
manufacturing facilities which are located in Rocky Mount and Fayetteville,
North Carolina and Jefferson, Georgia and combine to provide 845,000 square feet
manufacturing facilities. The division's sales and marketing headquarters are in
New York City, with branch offices or agents in other major cities throughout
the United States and Europe. The Texfi Blends Division contributed 60% of total
Company fiscal 1995 sales by manufacturing products made from textured
polyester, flame-retardant polyester, and blends of polyester, rayon, and wool.
These products are sold worldwide to the menswear, womenswear and childrenswear
apparel, uniform, home furnishings, and export markets.
The Kinsgtree Knit Apparel Division operates 676,000 square feet of
manufacturing facilities located in Haw River, North Carolina; Andrews,
Kingstree, Lane, and Olanta, South Carolina and Midway, Georgia. It has sales
offices in Haw River and Charlotte, North Carolina, as well as agents in major
cities throughout the United States. This division offers knit apparel made to
customer specifications in basic and fashion colors and a broad range of styles
and sizes. In addition to basic T-shirts, products include pocket T's, tank
tops, fleece tops, as well as hooded, striped, solid-dyed, print,
double-collar/double-sleeve, long-sleeve T's. These products are marketed to the
branded private label, promotional and garment dyeing markets as well as direct
to retailers, screen printers and distributors. Kingstree Knit Apparel also
commission knits, dyes and finishes fleece and jersey fabrics for other apparel
manufacturers. By emphasizing quality, quick response, innovation and
outstanding customer service, the Company believes this division effectively
competes in the fast-paced, fashion-oriented private label apparel business.
Kingstree Knit Apparel contributed 28% of the Company's fiscal 1995 sales.
The Texfi Narrow Fabrics Division operates 319,000 square feet of
manufacturing facilities in Asheboro and Graham, North Carolina. It maintains a
sales office in Asheboro, North Carolina and agents in several United States
cities. Texfi Narrow Fabrics contributed 12% of total Company fiscal 1995 sales
by manufacturing products from polyester, nylon and rubber which are sold
domestically to the intimate apparel, insert apparel, medical and automotive
markets.
2
<PAGE>
From its inception through 1984, the Company was engaged in
manufacturing fabrics made of textured polyester. The decline in consumer demand
for polyester knitwear prompted the Company to terminate its knit fabric
manufacturing operations in 1984 and restrict production to finished woven
fabrics. From 1986 until 1992, the Company's business strategy was to broaden
its customer base primarily through the acquisition of other textile operations.
These acquisitions allowed the Company to expand its operations into new
products such as yarn, greige woven fabrics, narrow fabrics (primarily
elasticized) and knitted apparel fabrics (primarily cotton t-shirts). While the
Company was able to diversify its products and increase its revenues as a result
of these acquisitions, many of these operations proved to be unprofitable and
resulted in substantially increased debt.
During the first quarter of 1995, management decided to discontinue
operations at its High Point, North Carolina Highland Yarns ("Highland")
facility and its Jefferson, Georgia diaper and corduroy facilities. The Company
discontinued operations and sold the fixed assets and inventory related to its
Marion, North Carolina greige goods operation during the second fiscal quarter
of 1995. These discontinuances and dispositions generated $17.5 million in
charges which are recorded as a loss from discontinued operations. Because the
Highland assets are recorded at the approximate net value expected to be
received from liquidation, management does not anticipate any additional future
losses related to these discontinued operations. As of November 3, 1995, the
Company held $1.5 million in Highland fixed assets which will be disposed of
through orderly liquidation during fiscal 1996.
PRODUCT GROUPS
The Company's manufactures three basic product groups:
* woven finished fabrics for the apparel, home furnishings and
export markets;
* knitted apparel (primarily T-shirts) for the private label and retail
markets
* narrow knitted and woven fabrics for the intimate apparel and insert
apparel markets, as well as automotive accessories and medical
applications;
The approximate percentage of total revenue contributed by each of the
Company's product groups is as follows:
1995 1994 1993
------ ------ ------
Woven finished fabrics 60.4 61.9 60.3
Knitted apparel
(primarily t-shirts) 27.9 25.6 28.5
Narrow fabrics
11.7 12.5 11.2
------ ------ ------
100.0 100.0 100.0
====== ====== ======
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SEASONALITY
During 1995 and 1994, the Company's business exhibited seasonality, primarily
due to temporary plant shutdowns during the Christmas/New Year's holiday season.
As a result, sales have been and are expected to be lower during the first
quarter of the fiscal year while working capital requirements increase in
anticipation of higher second quarter sales. Working capital is comprised
chiefly of inventories and accounts receivable. Inventories are reported at the
lower of cost or market value with cost being determined primarily by the
first-in, first-out method. Market value is based on replacement cost or net
realizable value, as appropriate. The majority of accounts receivable are due
from certain financial institutions with whom the Company has entered into
factoring agreements. The Company may be advanced funds in amounts not to exceed
90% of eligible accounts receivables plus 50% of eligible inventories not to
exceed a maximum of $10,000,000. All advances have been netted against total
factored receivables to comprise part of working capital.
BACKLOG
At November 3, 1995, the Company had a $57,267,000 backlog of orders
believed to be firm, as compared to a $61,030,000 backlog at October 28, 1994.
The decrease is attributable to the discontinuance and disposition of previously
discussed operations. The comparative backlog for the Company's three ongoing
operations actually increased from $43,037,000 as of the end of the 1994 fiscal
year. The current backlog of orders is expected to be filled prior to the end of
fiscal 1996.
CUSTOMERS
In fiscal 1995, the Company's products were sold to more than 1,000
customers, which were primarily domestic manufacturers of apparel and home
furnishings, as well as medical suppliers and retailers. Sales to the 10 largest
customers represented approximately 24% of total sales, but no one customer
accounted for more than 7% of total sales. The Company does not believe that the
loss of any one of its customers would have a material adverse effect on the
Company.
MARKETING
The Company's products are sold through a sales force of 29 full-time,
salaried account executives and 39 independent, commissioned sales
representatives who may sell products of other manufacturers, including some
competitors of the Company. The Company maintains sales offices in New York
City, as well as in Asheboro, Charlotte, and Haw River, North Carolina. The
Company's production is determined in large part by customer contracts which are
received by its sales force. As part of its marketing effort, the Company
continually works to develop new products and processes and improve existing
products and processes, but expenditures for these activities are not
financially identifiable.
In order to improve its customer service capabilities, the Company has
begun utilizing computerized networks with many of its customers in order to
provide "quick response" to customer requirements for more competitive product
deliveries. By providing these customers with certain direct inventory
information, the customers' inventory requirements can be reduced and their
inventory carrying costs lowered accordingly.
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<PAGE>
COMPETITION
The textile and apparel industry is highly competitive with a large number
of domestic and foreign manufacturers, none of which dominates the market for
any of the Company's product lines. The Company competes on the basis of
styling, price, product performance and customer service.
U.S. producers, including the Company, are significantly affected by
competition from foreign manufacturers. Rules under the recently enacted General
Agreement on Trade and Tariffs ("GATT") would eliminate restrictions on imports
of textiles and apparel after a ten-year transition period. The North American
Free Trade Agreement ("NAFTA") between the United States, Canada and Mexico has
created the world's largest free-trade zone. The Agreement contains safeguards
which were sought by the U.S. textile industry, including a rule of origin
requirement that products be processed in one of the three countries in order to
benefit from NAFTA. There can be no assurance that either NAFTA or GATT will not
adversely affect the Company.
Because of the absence of published information regarding sales of
competing products by other manufacturers, some of which are privately owned
companies or divisions or subsidiaries of large companies, it is not possible to
determine precisely the market shares of the Company and its competitors for the
Company's various products.
SOURCES OF RAW MATERIALS
The Company purchases from outside suppliers natural and synthetic fibers,
rubber, dyes and chemicals for use in its fabric manufacturing operations. The
Company purchases virtually all of its textured polyester yarns from the leading
independent domestic supplier of such yarns. Fabrics for its apparel
manufacturing operations are supplied by the Company's own fabric manufacturing
operations. The Company has not experienced a significant shortage of raw
materials and believes that such supplies will continue to be available.
EMPLOYEES
As of November 3, 1995, the Company had approximately 3,200 employees with
whom it considers its relationship to be good.
RESEARCH AND DEVELOPMENT
Although the Company pursues improvements in the quality, style and performance
of its products, research and development expenditures have not accounted for a
material portion of the Company's total operating costs.
5
<PAGE>
GOVERNMENTAL REGULATION
The Company believes that it is in substantial compliance with federal,
state and local provisions regulating the release of materials into the
environment, or otherwise relating to the protection of the environment.
The existence of groundwater contaminants primarily of a type often found
in commonly used industrial solvents was discovered at one of the Company's
facilities. This facility has not been operated by the Company since 1980 and
has been sold to another party. The State of North Carolina has issued a permit
to discharge treated groundwater, and treatment systems have been installed to
complete groundwater remediation. The Company's cost to monitor and maintain the
treatment system will be approximately $54,000 annually until the site is
remediated. In addition, there may be other potential environmental conditions
at the site to be addressed, and the remedial plan does not cover these
conditions; however, management does not believe that the cost of taking
corrective action will have a material adverse effect on the Company's financial
condition.
The Company has instituted a corporate policy statement on safety and
environmental affairs to ensure that the Company and its divisions comply with
federal, state and local regulatory standards relating to safety and
environmental pollution controls. Included in this policy is a requirement for
periodic compliance audits at each of the Company's facilities. The Company
believes that costs to be expended now or in the future to ensure compliance
with environmental and safety regulations will not have a material adverse
impact on the financial condition of the Company.
SEGMENT INFORMATION
Financial information as to industry segments is contained in Note 13 of
the Notes to the Consolidated Financial Statements which is included in Item 8
of this document.
Item 2. Properties.
The following table sets forth the location and general character of the
principal operating facilities of the Company, which contain approximately
1,840,000 square feet of floor space. All of these plants are in good operating
condition and, except as indicated below, owned by the Company. The plants of
the Texfi Blends and Texfi Narrow Fabrics Divisions operate three full
eight-hour shifts per workday on a five-, six- or seven-day-per-week basis,
depending upon market conditions and customer needs. Due to the nature of the
production process for the Company's apparel products, its Kingstree Knit
Apparel Division sewing plants operate on a single-eight hour shift, 5 day per
week basis whereas its Haw River, North Carolina fabric facility operates shifts
similar to the other divsions' fabric manufacturing facilities. The Company
believes that its facilities are suitable for their present use and that it has
adequate production capacity to support anticipated sales growth for fiscal
1996.
6
<PAGE>
Location of Plant Purpose Square Feet
Rocky Mount, NC Weaving, dyeing and finishing 448,000
of synthetic and blended fabrics
Haw River, NC Knitting, dyeing and finishing of 320,000
cotton and cotton-blended fabrics
Fayetteville, NC Weaving, dyeing and finishing of 218,000
polyester fabrics
Graham, NC Manufacturing of woven narrow 204,000
fabrics (primarily elasticized)
Jefferson, GA Yarn spinning and weaving 179,000
Georgetown, SC Knitted apparel distribution 133,000
center
Asheboro, NC Manufacturing of knitted narrow 115,000
fabrics (primarily elasticized)
Olanta, SC Manufacturing of knitted apparel 73,000
Andrews, SC Manufacturing of knitted apparel 65,000
Midway, GA (1) Manufacturing of knitted apparel 50,000
Lane, SC (1) Manufacturing of knitted apparel 20,000
Kingstree, SC(1) Manufacturing of knitted apparel 15,000
(1) Leased facility
Item 3. Legal Proceedings.
The Company is a party as plaintiff or defendant to various legal
actions which arose during the normal course of business. In the opinion of
management, final disposition of these actions will not have a material effect
on the Company's financial condition and results of operations.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
7
<PAGE>
Item 4A. Executive Officers of the Registrant.
All Positions and Offices with
Name Age the Registrant Presently Held
Richard L. Kramer 46 Chairman of the Board of Directors
William L. Remley 45 Chief Executive Officer, Vice Chairman
of the Board of Directors
Andrew J. Parise, Jr. 48 President, Chief Operating Officer
Dane L. Vincent 39 Chief Financial Officer, Treasurer
Gerald A. Rubinfeld 52 President, Texfi Blends Division
Michael A. Miller 49 President, Kingstree Knit Apparel
Division
Donnie K. Cantrell 46 President, Texfi Narrow Fabrics Division
Tim L. Courtney 56 Vice President, Administration
Thomas M. Gilreath 53 Corporate Controller, Assistant Secretary
Braxton Schell 71 Secretary
Mr. Richard L. Kramer was appointed Chairman of the Board of Directors on
November 1, 1994. He had previously served as Vice Chairman of the Board of
Directors since May 24, 1994. Mr. Kramer is Chairman of Mentmore Holdings
Corporation, Chairman of Sunderland Holdings Corp., Chairman of Republic
Properties Corporation, Chairman of CPT Holdings, Inc. and Chairman of Weldotron
Corp.
Mr. William L. Remley was appointed Chief Executive Officer and Vice
Chairman of the Board of Directors on November 1, 1994. He has served as a
Director since May 24, 1994. Mr. Remley is President of Mentmore Holdings
Corporation, President of CPT Holdings, Inc., President of Sunderland Industrial
Holdings Corp., Director of Republic Properties Corporation and President of
Weldotron Corporation.
Mr. Andrew J. Parise, Jr. was appointed President and Chief Operating
Officer of the Company on November 1, 1994. He previously served as the
Ccmpany's Blends Division President from 1992 to 1995 and the division's
Executive Vice President from 1990 to 1992. He has been with the Company in
various sales and operations positions since 1977.
Mr. Dane L. Vincent was appointed Chief Financial Officer during December
1995 after previously serving as Vice President of Finance and Treasurer from
December 1994. Mr. Vincent joined the Company in 1989 as Financial Accounting
Manager after a career in public accounting, where he worked for Ernst & Young
and other accounting firms.
Mr. Gerald A. Rubinfeld was appointed President of the Blends Division in
1995. He joined the Company in 1984 as the menswear Marketing Manager and held
various marketing positions prior to his appointment.
Mr. Michael A. Miller was appointed President of the Kinsgtree Knit
Apparel Division in 1992. He served as Executive Vice President and Chief
Financial Officer of the Company from 1988 to 1992 and served as the Company's
Treasurer from 1981 to 1992. Mr. Miller served as Vice President-Finance of the
Company from 1982 to 1988 and as a Director from 1986 to 1992.
8
<PAGE>
Mr. Donnie K. Cantrell was appointed President of the Texfi Narrow Fabrics
Division in 1995. He joined the Company as the Vice-President of Marketing in
1990 after a 23 year career with Miliken & Co. Prior to promotion to his current
position, Mr. Cantrell was the division's General Manager.
Mr. Tim L. Courtney was appointed Vice President of Administration in
1994. He joined the Company's Lively Knits Division (since disbanded) in 1966
and served in a variety of positions with the Company, including Director of
Fiber and Yarn Procurement and VP of Marketing Services for the Blends Division.
Mr. Thomas M. Gilreath was appointed Corporate Controller and Assistant
Secretary in 1994. He joined the Company in 1986 after spending more than 20
years in a variety of accounting positions with the Crompton company and with
the Bigelow Sanford Carpet Company. Prior to his current position Mr. Gilreath
was Vice President/Corporate Controller at the Texfi's Blends Division.
Mr. Braxton Schell, an attorney, is a partner in the Greensboro, North
Carolina, law firm of Schell Bray Aycock Abel & Livingston L.L.P., which serves
as general counsel to the Company. He has served as Secretary since 1963 and was
elected a Director in 1970. He also is a director of Kenan Transport Company and
Flagler System, Inc.
Item 4(b). Other Information
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The Registrant's Common Stock is traded on the New York Stock Exchange. The
approximate number of holders of record as of January 12, 1996 was 1,117.
The following table sets forth the high and low sales prices for the Common
Stock on the NYSE composite tape for the period indicated.
Quarter
First Second Third Fourth
1995 Fiscal Year:
High 3 3-3/8 3-1/8 3-1/8
Low 2-3/8 2-1/2 2-3/4 2-3/8
1994 Fiscal Year:
High 5-1/8 4-1/8 3-3/4 3-3/8
Low 3-3/8 3-3/8 2-3/4 2-3/4
The Company did not pay dividends on its Common Stock in either fiscal 1995
or 1994 and does not intend to do so in the foreseeable future.
9
<PAGE>
Item 6. Selected Financial Data.
T E N - Y E A R R E V I E W O F
P E R F O R M A N C E
(Dollar amounts in thousands except per share data and the number of employees)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Summary of Operations
Net Sales $257,527 $218,097 $237,265
Cost and expenses:
Cost of goods sold 228,556 196,524 212,633
Selling, general and administrative 16,247 14,448 16,328
Interest 12,116 10,713 10,190
Loss on discontinued operations -- -- --
Equity losses (earnings) of unconsolidated subsidiary -- -- --
Other expense (income) (22) (1,596) 2,000
Total cost and expenses 256,897 220,089 241,151
Income (loss) before income taxes, discontinued operations and extraordinary
items 630 (1,992) (3,886)
Provision for income taxes -- -- --
Income (loss) before discontinued operations and extraordinary items 630 (1,992) (3,886)
Discontinued operations;
Loss from operations (2,219) (6,359) (3,244)
Loss on disposal (15,325) -- (1,353)
Net (loss) income (16,914) (8,351) (8,483)
Redeemable preferred stock:
Dividend paid -- -- (555)
Accretion of issue costs -- -- --
Net (loss) income applicable to common stockholders $(16,914) $ (8,351) $ (9,038)
Income (loss) from continuing operations per common share $ .07 $ (.25) $ (.58)
Net (loss) income per common share $ (1.96) $ (1.03) $ (1.18)
Other Operating Data
Capital expenditures $ 2,966 $ 3,333 $ 10,054
Depreciation 8,182 9,441 8,693
Cost of equipment placed in service under operating leases 2,965 -- --
Number of employees 3,221 4,399 4,404
Financial Position at Year End
Receivables -- net $ 9,173 $ 10,350 $ 17,138
Inventories 28,092 42,131 38,908
Current assets 41,062 56,184 60,930
Property, plant & equipment, net 50,514 75,945 82,211
Total assets 96,045 137,180 149,660
Current liabilities 37,408 44,013 44,310
Long-term debt 12,471 25,015 32,968
Subordinated debentures 40,724 45,127 45,187
Other long-term obligations 1,205 1,842 2,652
Redeemable preferred stock -- -- --
Common stockholders' equity 4,237 21,183 24,543
Working capital 4,194 12,171 16,620
Book Value Per Common Share $ 0.49 $ 2.45 $ 3.19
Common Stock Price Range
High $ 3.375 $ 5.125 $ 9.000
Low 2.375 2.750 3.750
</TABLE>
*Per share data has been restated to give effect to a 4-for-3 stock split
effective July 23, 1987.
For the years presented, there were no dividends paid to common stockholders.
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<TABLE>
<CAPTION>
1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C>
$327,881 $322,020 $274,519 $233,859 $185,265 $162,842 $ 85,046
286,883 290,420 246,739 201,474 159,714 137,736 75,430
18,214 18,181 14,733 14,196 11,402 11,267 5,526
9,515 12,791 9,668 4,772 2,361 4,310 3,541
-- 8,603 -- -- -- -- 323
3,867 5,173 (38) -- -- -- --
(6,595) 602 (341) 82 (341) 491 84
311,884 335,770 270,761 220,524 173,136 153,804 84,904
15,997 (13,750) 3,758 13,335 12,129 9,038 142
2,385 442 583 826 439 -- --
13,612 (14,192) 3,175 12,509 11,690 9,038 142
(524) (133) -- -- -- -- --
-- -- -- -- -- -- --
13,088 (14,325) 3,175 12,509 11,690 9,038 142
(673) (1,323) (2,319) (2,591) (1,619) -- --
(8) (228) (772) (605) (431) -- --
$ 12,407 $(15,876) $ 84 $ 9,313 $ 9,640 $ 9,038 $ 142
$ 1.69 $ (2.11) $ .01 $ 1.19 $ 1.18 $ 1.11 $ .03*
$ 1.62 $ (2.13) $ .01 $ 1.19 $ 1.18 $ 1.11 $ .03*
$ 5,342 $ 10,089 $ 22,477 $ 19,264 $ 10,114 $ 4,111 $ 2,009
7,442 6,916 5,010 3,599 2,506 2,279 1,757
-- -- 4,586 9,634 13,648 -- --
4,271 4,022 3,906 3,505 2,444 2,180 1,975
$ 12,753 $ 25,248 $ 24,227 $ 16,195 $ 25,569 $ 18,234 $ 13,486
39,861 38,045 45,280 43,684 19,667 15,527 14,710
56,160 68,407 76,473 63,788 51,724 37,162 29,341
81,185 70,162 68,915 51,857 34,499 26,725 22,087
144,630 146,759 156,061 120,254 87,008 65,479 52,527
39,896 49,263 39,547 38,782 18,939 20,461 16,196
46,876 47,744 45,747 8,699 3,256 9,951 10,532
19,001 19,074 17,976 11,623 11,875 13,616 13,805
583 505 441 399 409 433 455
5,206 9,095 16,464 24,004 23,400 -- --
33,068 20,009 35,886 36,747 29,129 21,018 11,539
16,264 19,144 36,926 25,006 32,785 16,701 13,145
$ 4.35 $ 2.68 $ 4.80 $ 4.83 $ 3.72 $ 2.61 $ 1.48*
$ 9.250 $ 7.500 $ 9.625 $ 12.000 $ 7.000 $ 10.313* $ 4.031*
3.875 3.875 3.875 5.750 4.125 3.469* 2.063*
</TABLE>
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Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
M A N A G E M E N T ' S D I S C U S S I O N A N D A N A L Y S I S O F
R E S U L T S O F O P E R A T I O N S A N D F I N A N C I A L
C O N D I T I O N
Results of Operations
Results of operations for 1994 and 1993 have been restated to reflect the
discontinuance of certain operations as follows:
-- The discontinuance of the Company's Highland Mills ("Highland") yarn and
Jefferson Mills ("Jefferson") diaper and corduroy fabric production
during the Company's first fiscal quarter of 1995, and
-- The discontinuance and sale of the Company's Marion Fabrics ("Marion")
greige goods business during the second fiscal quarter of 1995.
Fiscal Year 1995 Compared with Fiscal Year 1994
Net sales for fiscal 1995 increased to $257.5 million from $218.1 million,
an increase of $39.4 million or 18%. This increase resulted from improved sales
at each of the Company's three divisions: $20.5 million in finished fabrics,
$16.0 million in apparel, and $2.9 million in narrow fabrics. The finished
fabrics division improved primarily as a result of increased demand and delivery
of many of the division's synthetic fabrics to the junior girls, women's wear
and export markets. Apparel sales increased primarily as a result of the
division's continued emphasis on selling primarily to customers in the "private
label" and retail areas of the T-shirt business.
Cost of goods sold ("CGS"), as a percentage of net sales, decreased from
90.1% to 88.8% in 1995. This decrease resulted primarily from a combination of
changes in the product mix at the appparel division to products with higher
margins and a reduction in volume-related operating costs within both the
finished fabrics and narrow fabrics divisions. These improvements were partially
offset by increased raw material costs, primarily cotton and synthetic yarns.
Selling, general and administrative expenses ("SG&A") as a percentage of
sales decreased from 6.6% in the prior year to 6.3% in 1995. This decrease is
primarily a result of the Company's success in keeping the fixed portion of
these costs relatively constant (approximately 70% of SG&A is fixed in nature)
as the Company increased its 1995 sales volume when compared to 1994.
Financial information as to industry segments is contained in Note 13 of the
Notes to the Consolidated Financial Statements.
Interest expense increased $1.4 million during 1995 when compared with 1994
despite the Company reducing total debt and factor advances by approximately $25
million primarily during its second and third fiscal quarters of 1995. Interest
expense rose primarily due to increases in the prime rate of interest and other
comparable interest rate measures, which occurred throughout late fiscal 1994
and fiscal 1995.
Other income decreased to $22,000 in 1995 as compared to $1.6 million in
1994 which included receipt of approximately $1.5 million for the settlement of
a lawsuit.
During fiscal 1995, the Company recorded charges totaling $17.5 million to
discontinue its Highland, Jefferson and Marion operations. These charges
included a loss on disposal of operations totaling $15.3 million which is
comprised of the following: $9.8 million in property, plant and equipment, $3.1
million in accounts and notes receivable, $1.2 million in inventory, and $1.2
million in other various costs. As of the end of fiscal 1995, the Company has
disposed of all of the assets and liabilities relating to these discontinued
operations except for $1.5 million of net property, plant and equipment at
Highland which will be liquidated during fiscal
12
<PAGE>
1996 at a price approximating net book value. These discontinued operations
generated $21.8 million in sales, $22.4 million in CGS, and $1.6 million in SG&A
during fiscal 1995, as compared to $64.8 million, $66.1 million, $4.9 million
and $200,000 of sales, CGS, SG&A, and other expense, respectively, in the prior
fiscal year.
As discussed more fully in Note 9 of the Consolidated Financial Statements,
as of November 3, 1995, net operating loss carryforwards of approximately $44.8
million remain to offset future taxable income.
Fiscal Year 1994 Compared with Fiscal Year 1993
Net sales for fiscal 1994 decreased to $218.1 million compared to net sales
of $237.3 million in 1993. This $19.2 million (8.1%) decrease resulted from the
decreased sales of finished fabrics ($24.4 million) which offset increased sales
of knit apparel (primarily T-shirts) ($4.5 million) and narrow fabrics
($721,000). The decreased sales of finished fabrics resulted primarily from the
continued weakness of the retail market for apparel made from synthetic finished
fabrics, primarily polyester and rayon. The increased sales of knit apparel
resulted from the Company's change of its product mix from basic T-shirts to
more fashion and value-added products as well as improved market conditions in
the overall T-shirt market.
CGS, as a percentage of net sales, increased from 89.6% in 1993 to 90.1% in
1994. This increase resulted from a combination of changes in product mix and
selling prices, increases in raw material costs, primarily cotton, and other
volume-related operating costs, and fixed manufacturing costs increasing as a
percentage of sales.
SG&A decreased from 6.9% to 6.6% as a percentage of sales for fiscal 1994
compared with fiscal 1993. This decrease resulted primarily from the Company's
efforts to reduce or maintain fixed SG&A expenses, primarily salaries and
benefits, at their 1993 levels.
Interest expense increased approximately $523,000 (5.1%) from $10.2 million
in 1993 to $10.7 million. This increase resulted primarily from the redemption
of $5.1 million of preferred stock with a portion of the proceeds from the
issuance of $34.5 million of Senior Subordinated Debentures due August 1, 1999
("8.75% Debentures") during the fourth quarter of fiscal 1993. In addition,
increases in the prime rate of interest from 6% to 7.75% during fiscal 1994
along with corresponding increases in other comparable interest rate measures
resulted in increased interest on the Company's variable rate debt and factor
advances. These increases offset decreases in interest which resulted from the
Company reducing its debt obligations by $7.3 million in 1994 as reflected on
the statement of cash flows.
Other income totaled $1.6 million in 1994 as compared to other expense of
$2.0 million in 1993. This change was due to nonrecurring charges ($2.1 million)
in 1993 and income ($1.5 million) in 1994 for the settlement of various
lawsuits.
Capital Resources and Liquidity
During 1995 and 1994, the Company's business exhibited seasonality,
primarily due to temporary plant shutdowns during the Christmas/New Year's
holiday season. As a result, sales have been and are expected to be lower during
the first quarter of the fiscal year while working capital requirements increase
in anticipation of higher second quarter sales. Working capital is comprised
chiefly of accounts receivable and inventory. Traditionally, the Company has
maintained financing capacity for working capital and other general corporate
purposes under certain factoring agreements and other comparable short-term
borrowing arrangements. The Company may be advanced funds in amounts not to
exceed 90% of eligible accounts receivable plus 50% of eligible inventories, not
to exceed a maximum of $10 million. The amounts reported on the balance sheet as
"Due From Factor" represent accounts receivable with factors net of advances. As
of November 3, 1995, the Company had approximately $11.0 million of funds
available under its factoring arrangements.
13
<PAGE>
As of November 3, 1995, working capital equaled $4.2 million, a decrease of
$8 million from the fiscal year ended October 28, 1994. This decrease in working
capital is due primarily to decreases in inventory ($14.0 million) and accounts
receivable ($1.2 million) which more than offset decreases in current maturities
of long-term debt ($3.0 million) and accounts payable ($2.8 million) and
increases in property, plant and equipment held for disposal ($1.5 million).
Reductions in inventories and accounts receivable resulted primarily from the
discontinuance of certain Company operations as previously discussed.
The Company's operating activities generated $13.0 million in net cash
during the 1995 fiscal year. Adjustments to the fiscal year net loss of $16.9
million included non-cash transactions of $12.3 million and the net loss on
disposition of property, plant and equipment of $9.4 million. In addition, while
reductions in inventories, prepaid and other assets provided $14.4 million,
increases in receivables and decreases in liabilities required $6.2 million.
Cash flows generated by operations when combined with the $9.4 million in net
proceeds from the sale of property, plant and equipment were applied to reduce
long-term debt and subordinated debentures totaling $20.0 million and purchase
property, plant and equipment and intangibles approximating $3.1 million.
During the second quarter of fiscal 1995, the Company sold its discontinued
Marion Fabrics greige goods operations for approximately $10.7 million, which
included all property, plant and equipment and inventory related to the Marion,
N.C. plant. During the fourth quarter of fiscal 1995, the Company incurred an
additional $2.0 million loss on discontinued operations, primarily due to
default by the purchaser of Marion Fabrics on the $2 million subordinated note
received in conjunction with the sale cash proceeds. The note receivable was
sold to affiliates of the purchaser for $400,000 after reduction by $330,000 for
certain post-closing adjustments.
On October 29, 1990, the Company obtained a $40 million credit facility,
which has been fully funded. Borrowings under the credit facility bear interest,
at the Company's option, at either prime plus 1% or an alternative rate based
upon LIBOR or CD rates. The facility balance outstanding at the end of the 1995
fiscal year totaling $18 million is payable in monthly installments through the
end of fiscal 1997. The credit facility places limitations on the Company's
rental expense, additional indebtedness, acquisitions, capital expenditures and
sale or disposal of assets. The Company is also required to maintain a stated
amount of working capital and tangible net worth as well as certain financial
ratios, including stated ratios of assets to current liabilities and of earnings
to fixed charges. This facility has been periodically amended as follows: (i) to
make the restrictive covenants less restrictive in order that the Company would
remain in compliance with all covenant requirements, (ii) defer and reduce
principal payments to assist the Company in meeting its cash demands, (iii)
provide for the applicable interest rate margin on the prime, CD and LIBOR rates
of interest to be changed within a certain range based on the ratio of the
Company's senior debt plus factor advances to earnings before interest, taxes,
depreciation and amoritzation and raise the margin associated with the CD and
LIBOR rates of interest, and (iv) effect certain other changes. The Company is
in compliance with all of the facility's covenant requirements.
As of November 3, 1995 the Company has approximately $2.7 million of its
Series C Debentures outstanding. The annual interest rate of these debentures
may be adjusted at the sole discretion of the Company on April 1st of each year
until maturity in the year 2000. The Series C Debentures are redeemable on April
1st of each year, in whole or in part, at the option of the holder or the
Company for the principal amount thereof plus accrued interest through the date
of redemption.
On September 8, 1993, the Company issued $34.5 million in principal amount
of Senior Subordinated Debentures due August 1, 1999 ("8 3/4% Debentures"). The
8 3/4% Debentures, which cannot be called prior to their maturity date, are
unsecured obligations but contain covenants that place limitations on the use of
proceeds from disposal of assets and on the incurrence of additional
indebtedness and senior indebtedness (as defined in the indenture) if such
indebtedness would exceed stated ratios of capitalization and earnings after
such incurrence. Under the most restrictive of these covenants, the Company may
not incur additional indebtedness if, after giving effect to such incurrence,
the aggregate amount of indebtedness of the Company would
14
<PAGE>
exceed 75% of the sum of all indebtedness and stockholders' equity. Advances
under the Company's factoring agreements are not considered indebtedness for the
purpose of these covenants. The Company is currently prohibited by this covenant
from incurring aditional indebtedness because of the 1995 reduction in common
stockholders' equity primarily resulting from the $17.5 million charges to
record discontinued operations.
Net proceeds from the issue of the 8 3/4% Debentures was $33.5 million (net
$1.0 million issue costs). These funds were used to redeem all outstanding
shares of preferred stock ($5.1 million) and all outstanding Series A and Series
B Debentures ($8.4 million), repay long-term debt ($8.1 million) and reduce
factor advances ($11.9 million).
The Company has significant lease obligations that are classified as
operating leases and therefore are not reflected in the balance sheet. The
aggregate future minimum lease payments under these leases for their initial or
remaining noncancellable terms were $10.7 million as of November 3, 1995,
including $3.2 million for fiscal 1996. The Company plans to place into service
$7.7 million of machinery and equipment during fiscal 1996. This equipment
primarily will increase fabric dyeing and finishing capacity and further
automate the inspection process at the Company's finished fabrics division as
well as increase knit apparel production sewing capacity. Management anticipates
that approximately $7.3 million of the $7.7 million of equipment will be placed
into service through a committed operating lease line and thus excluded from the
Company's balance sheet.
Management believes cash flows from operations and funds available under
factoring agreements will provide the Company with sufficient sources of funds
to meet its 1996 cash needs and, assuming no significant deterioration in
current market conditions, for the foreseeable future.
Environmental Matters and Litigation
In 1992 the Company adopted a corporate policy statement on safety and
environmental affairs to ensure that the Company and its divisions comply with
all federal, state and local regulatory standards relating to safety and
environmental pollution controls. Included in this policy is a requirement for
periodic compliance audits at each of the Company's facilities. The Company has
addressed and continues to address certain environmental conditions and
potential conditions at a former plant site. The Company believes that costs to
be expended now or in the future to ensure compliance with environmental and
safety regulations will not have a material adverse impact on the financial
statements of the Company.
The Company is also involved in various litigation arising during the
ordinary course of business. The final resolution of these matters cannot be
determined; however, it is management's opinion these matters will not have a
material adverse effect on the Company's financial position and future
liquidity.
Inflation
The Company believes that inflation affects its business to an extent no
greater than it affects the textile and apparel industries generally and the
economy as a whole.
15
<PAGE>
Item 8. Financial Statements and Supplementary Data.
C O N S O L I D A T E D S T A T E M E N T S O F O P E R A T I O N S
For the fiscal years ended November 3, 1995, October 28, 1994 and October 29,
1993
(Dollar amounts in thousands except per share data)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net Sales $257,527 $218,097 $237,265
Cost and Expenses:
Cost of goods sold 228,556 196,524 212,633
Selling, general and administrative 16,247 14,448 16,328
Total 244,803 210,972 228,961
Operating Income 12,724 7,125 8,304
Other Expense (Income):
Interest 12,116 10,713 10,190
Other, net (22) (1,596) 2,000
Total 12,094 9,117 12,190
Net Income (Loss) From Continuing Operations 630 (1,992) (3,886)
Discontinued Operations:
Loss from operations of discontinued operations (2,219) (6,359) (3,244)
Loss on disposal of discontinued operations (15,325) -- (1,353)
Net loss from discontinued operations (17,544) (6,359) (4,597)
Net Loss (16,914) (8,351) (8,483)
Dividends paid on redeemable preferred stock -- -- (555)
Net Loss Applicable to Common Stockholders $(16,914) $ (8,351) $ (9,038)
Earnings (Loss) Per Share (Note 7)
Primary:
Income (loss) from continuing operations $ .07 $ (.25) $ (.58)
Loss from discontinued operations (2.03) (.78) (.60)
Net loss $ (1.96) $ (1.03) $ (1.18)
Fully diluted:
Income (loss) from continuing operations $ .07 $ (.25) $ (.58)
Loss from discontinued operations (2.03) (.78) (.60)
Net loss $ (1.96) $ (1.03) $ (1.18)
</TABLE>
See notes to consolidated financial statements.
16
<PAGE>
C O N S O L I D A T E D B A L A N C E S H E E T S
November 3, 1995 and October 28, 1994
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 747 $ 1,468
Receivables:
Trade, less allowances ($1,362 -- 1995; $4,287 -- 1994) 1,958 170
Due from factor 6,971 10,024
Other 244 156
Inventories (Note 2) 28,092 42,131
Prepaid expenses 2,077 2,235
Property, plant and equipment held for disposal -- net 1,513 --
Total 41,602 56,184
Property, Plant and Equipment -- Net (Notes 3 and 4) 50,514 75,945
Other Assets 3,929 5,051
$96,045 $137,180
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt (Note 4) $ 8,452 $ 11,462
Accounts payable 22,742 25,531
Other liabilities 6,144 6,950
Federal and state income taxes 70 70
Total 37,408 44,013
Long-term Debt (Note 4) 12,471 25,015
Subordinated Debentures (Note 5) 40,724 45,127
Other Long-term Obligations 1,205 1,842
Contingent Liabilities and Commitments (Note 12)
Common Stockholders' Equity:
Common stock, $1.00 par value -- authorized 20,000,000 shares; outstanding 8,650,690 shares in
1995 and 8,652,621 shares in 1994 (Notes 6 and 7) 8,651 8,653
Additional paid-in capital 25,069 25,099
Retained earnings (deficit) (29,483) (12,569)
Total 4,237 21,183
$96,045 $137,180
</TABLE>
See notes to consolidated financial statements.
17
<PAGE>
C O N S O L I D A T E D
S T A T E M E N T S O F C O M M O N S T O C K H O L D E R S ' E Q U I T Y
For the fiscal years ending November 3, 1995, October 28, 1994 and October 29,
1993
(Dollar amounts in thousands)
<TABLE>
<CAPTION>
Common Stock Additional Retained
$1 Par Value Paid-in Earnings Treasury
Shares Amount Capital (Deficit) Stock Total
<S> <C> <C> <C> <C> <C> <C>
October 30, 1992 8,534,175 $8,534 $ 24,721 $ 4,820 $(5,007 ) $ 33,068
Net loss for fiscal 1993 (8,483) (8,483)
Stock options exercised 13,500 13 62 75
Stock tendered as payment for option shares (3,800) (4 ) (22) (26)
Stock issued under various employee stock
plans 76,686 77 383 460
Conversion of subordinated debentures 522 1 3 4
Cash dividends paid on redeemable preferred
stock (555) (555)
October 29, 1993 8,621,083 8,621 25,147 (4,218) (5,007 ) 24,543
Net loss for fiscal 1994 (8,351) (8,351)
Stock issued under Directors' Deferred Comp
Plan 37,209 37 93 130
Restricted stock forfeitures (6,385) (6 ) (29) (35)
Stock issued under various employee stock
plans 1,381 1 4 5
Sale of treasury stock (924,000 shares) (667) (116) 5,007 4,891
October 28, 1994 8,652,621 8,653 25,099 (12,569) -- 21,183
Net loss for fiscal 1995 (16,914) (16,914)
Restricted stock forfeitures (5,000) (5 ) (34) (39)
Stock issued under various employee stock
plans 3,069 3 4 7
November 3, 1995 8,650,690 $8,651 $ 25,069 $(29,483) $ -- $ 4,237
</TABLE>
See notes to consolidated financial statements.
18
<PAGE>
C O N S O L I D A T E D S T A T E M E N T S O F C A S H F L O W S
For the fiscal years ended November 3, 1995, October 28, 1994 and October 29,
1993
(Dollar Amounts in thousands)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Operating Activities:
Net loss $(16,914) $ (8,351) $ (8,483)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 9,147 11,005 10,413
Provision for losses on accounts receivable 3,196 2,568 3,075
Loss (gain) on disposition of property, plant and equipment 9,356 (2) 122
Change in operating assets and liabilities:
Accounts receivable (2,019) 4,220 (7,460)
Inventories 14,039 (3,223) 953
Prepaid and other assets 386 212 (964)
Accounts payable and other liabilities (4,232) (1,669) 4,605
Income taxes payable -- -- (352)
Net Cash Provided by Operating Activities 12,959 4,760 1,909
Investing Activities:
Purchases of property, plant and equipment (2,966) (3,333) (10,054)
Proceeds from sale of property, plant and equipment 9,434 160 213
Net Cash Provided by (Used in) Investing Activities 6,468 (3,173) (9,841)
Financing Activities:
Proceeds from long-term debt borrowings -- -- 4,904
Proceeds from issue of subordinated debentures -- -- 34,500
Payments on long-term debt and capital lease obligations (15,554) (7,391) (16,582)
Payments for repurchase of subordinated debentures (4,403) (60) (8,310)
Capitalized loan costs (159) -- --
Proceeds from sale of treasury stock, net -- 4,891 --
Proceeds from employee stock plans, net 7 135 535
Restricted stock forfeitures (39) (35) (26)
Payments for retirement of preferred stock -- -- (5,206)
Dividends paid on preferred stock -- -- (555)
Net Cash (Used in) Provided by Financing Activities (20,148) (2,460) 9,260
(Decrease) Increase in Cash and Cash Equivalents (721) (873) 1,328
Cash and Cash Equivalents at Beginning of Period 1,468 2,341 1,013
Cash and Cash Equivalents at End of Period $ 747 $ 1,468 $ 2,341
</TABLE>
See notes to consolidated financial statements.
19
<PAGE>
N O T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S
November 3, 1995, October 28, 1994 and October 29, 1993
1. Summary of Significant Accounting Policies
A. Principles of Consolidation
The consolidated financial statements include the accounts of the divisions
of Texfi Industries, Inc. and one wholly-owned inactive subsidiary (the
"Company"). Intercompany transactions and profits and losses have been
eliminated.
B. Fiscal Year
The Company's operations are based on a fifty-two, fifty-three week fiscal
year ending on the Friday closest to October 31. The 1995 fiscal year includes
53 weeks while the 1994 and 1993 fiscal years each consist of 52 weeks.
C. Reclassifications
Certain amounts have been reclassified to conform with the 1995 presentation
and reflect discontinued operations. There is no effect on net income or common
stockholders' equity.
D. Accounts Receivable -- Factored
The Company has entered into factoring agreements with several financial
institutions whereby it may assign certain receivables generally without
recourse as to credit risk. As a result, these factored receivables are shown
net of funds borrowed in advance of collection on such sales. The Company may be
advanced funds in amounts not to exceed 90% of eligible accounts receivable plus
50% of eligible inventories, not to exceed a maximum of $10 million. Gross
factor receivables and advances equaled $51.5 million and $44.5 million,
respectively, at November 3, 1995 and $59.2 million and $49.2 million,
respectively, at October 28, 1994. Concentration of credit risk is limited due
to the large number of customers to which the Company sells its products (no one
customer accounted for more than 7% of the Company's 1995 sales or 4% of the
Company's 1994 sales) and the use of several factors to assign the invoices for
sales to its customers. The Company generally requires no collateral for its
accounts receivable. Interest paid on factor advances in 1995, 1994 and 1993 was
$4,676,000, $3,150,000 and $3,535,000, respectively.
E. Inventories
Inventories are stated at the lower of cost or market value. Cost is
determined primarily on the basis of the first-in, first-out method. Market
value is based on replacement cost or net realizable value, as appropriate.
F. Property, Plant and Equipment
Property, plant and equipment is stated at cost. For financial statement
purposes, depreciation is determined primarily by the straight-line method. For
income tax purposes, the straight-line and accelerated methods are used.
Interest costs incurred in the construction or acquisition of property, plant
and equipment are capitalized.
G. Revenue Recognition
Sales are recorded upon shipment or designation of specific goods for later
shipment at customers' request with related risk of ownership passing to such
customers.
20
<PAGE>
H. Income Taxes
The Company accounts for income taxes using the liability method. Deferred
tax liabilities are determined based on the difference between the financial
statement and tax bases of assets and liabilities as measured by the enacted
rates which will be in effect when these temporary differences reverse. Deferred
tax expense results from the change in the liability accounts for deferred
taxes. Investment tax credits are accounted for by the flow-through method as a
reduction of federal income tax expense.
I. Amortization of Goodwill
Goodwill, which represents the excess of the cost of purchased companies
over the fair value of their net assets at dates of acquisition, is being
amortized on the straight-line method over 40 years. The carrying value of
goodwill is reviewed if the facts and circumstances suggest that goodwill may be
impaired. Should this review indicate that goodwill will not be recoverable, the
Company would reduce the recorded goodwill by an appropriate amount.
J. Earnings Per Common Share
Primary earnings per common share are based on the average number of shares
of common stock and common stock equivalents of dilutive stock options
outstanding during the year.
Fully diluted earnings per common share are computed assuming conversion of
the 11 1/4% Convertible Senior Subordinated Debentures into common stock as of
the beginning of the year, and the interest expense thereon, net of income
taxes, was added to net income.
K. Discontinued Operations
During the first quarter of 1995, the Company discontinued its commodity
yarn, corduroy and diaper fabric production. During the second quarter of 1995,
the Company discontinued and sold its greige goods manufacturing facility.
Operating losses for these operations totaling $6.24 million ($.77 per share)
and $2.52 million ($.33 per share), in 1994 and 1993, respectively, have been
reclassified in the Consolidated Statements of Operations. As of November 3,
1995, property, plant and equipment related to discontinued operations which
will be disposed of by orderly liquidation during the 1996 fiscal year are as
follows (in thousands):
<TABLE>
<S> <C>
Land and land improvements $ 864
Buildings 532
Machinery, equipment, etc. 1,587
Total 2,983
Less accumulated depreciation 657
Less reserve for net realizable value 813
Property, plant and equipment -- net $1,513
</TABLE>
During the fourth quarter of 1993, the Company discontinued its retail
operations and classified $721,000 of 1993 operating losses as loss from
operations of discontinued operations in the Consolidated Statement of
Operations.
L. Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
21
<PAGE>
2. Inventories
Inventories at November 3, 1995 and October 28, 1994 are summarized as
follows:
[CAPTION]
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
(in thousands)
<S> <C> <C>
Finished goods $10,919 $17,108
Goods in process 10,261 14,912
Raw materials 4,160 6,513
Supplies 2,752 3,598
Total $28,092 $42,131
</TABLE>
3. Property, Plant and Equipment
Property, plant and equipment at November 3, 1995 and October 28, 1994
consists of the following:
[CAPTION]
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
(in thousands)
<S> <C> <C>
Land and land improvements $ 2,841 $ 3,969
Buildings 23,099 27,414
Machinery, equipment, etc. 83,531 105,492
Leasehold improvements 64 171
Construction in progress 772 1,256
Total 110,307 138,302
Less accumulated depreciation 59,793 62,357
Property, plant and equipment -- net $ 50,514 $ 75,945
</TABLE>
4. Long-term Debt, Pledged Assets and Notes Payable
Long-term debt at November 3, 1995 and October 28, 1994 consists of the
following:
[CAPTION]
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
(in thousands)
<S> <C> <C>
Term loan with variable interest rate (8.4202% at November 3, 1995 and 8.1875% at October 28,
1994) and period options. Principal payments due monthly through October 31, 1997;
collateralized by property, plant and equipment having a netbook value of $14,757,000 $17,998 $27,798
Term loans at 6.75%, payable in monthly installments plus interest through November 1, 1998;
collateralized by property, plant and equipment having a net book value of $3,503,000 1,800 3,502
Term loan at prime plus 1%, payable in equal monthly installments plus interest through October
1997; collateralized by property, plant and equipment having a netbook value of $14,761,000 620 4,500
Other obligations, including capitalized leases, principally at prime, payable through 2009;
collateralized by property, plant and equipment having a net book value of $505,000 505 677
Total 20,923 36,477
Less current maturities 8,452 11,462
Due after one year $12,471 $25,015
</TABLE>
22
<PAGE>
Payments due on long-term debt during each of the five succeeding years and
thereafter are listed below:
<TABLE>
<CAPTION>
Fiscal
Year Total
<S> <C>
<CAPTION>
(in thousands)
<S> <C>
1996 $ 8,452
1997 11,475
1998 558
1999 27
2000 30
Thereafter 381
$20,923
</TABLE>
Certain long-term debt agreements contain various covenants and
restrictions, including (a) provisions relating to maintenance of working
capital, certain financial ratios, and a specified minimum total of net worth
and subordinated debt, as defined, and (b) restrictions on additional borrowings
and the purchase, sale and lease of real and personal property.
Interest paid on debt, other than debentures, in 1995, 1994 and 1993 was
$2,504,000, $2,885,000, and $3,220,000, respectively.
5. Subordinated Debentures
Debentures outstanding at November 3, 1995 and October 28, 1994 consist of
the following:
[CAPTION]
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
(in thousands)
<S> <C> <C>
Senior Subordinated Debentures, 8 3/4%, due August 1, 1999 $34,430 $34,440
Subordinated Extendible Debentures, 11%, due April 1, 2000 (Series C) 2,757 7,150
Convertible Senior Subordinated Debentures, 11 1/4%, due October 1, 1997 3,537 3,537
$40,724 $45,127
</TABLE>
On September 8, 1993, the Company issued $34.5 million in principal amount
of Senior Subordinated Debentures due August 1, 1999 ("8 3/4% Debentures"). The
8 3/4% Debentures, which cannot be called prior to their maturity date, are
unsecured obligations but contain covenants that place limitations on the use of
proceeds from disposal of assets and on the incurrence of additional
indebtedness and senior indebtedness (as defined in the indenture) if such
indebtedness would exceed stated ratios of capitalization and earnings after
such incurrence. Under the most restrictive of these covenants, the Company may
not incur additional indebtedness if after giving effect to such incurrence, the
aggregate amount of indebtedness of the Company would exceed 75% of the sum of
all indebtedness and stockholders' equity. Advances under the Company's
factoring agreements are not considered indebtedness for the purpose of these
covenants. The Company is currently prohibited by this covenant from incurring
additional indebtedness because of the 1995 reduction in common stockholders'
equity primarily from the $17.5 million charge to record discontinued
operations.
Net proceeds from the issue of the 8 3/4% Debentures totaled $33.5 million
(net $1.0 million issue costs). These funds were used to redeem all outstanding
shares of preferred stock ($5.1 million) and all outstanding Series A and Series
B Debentures ($8.4 million), repay long-term debt ($8.1 million) and reduce
factor advances ($11.9 million).
In April 1990, the Company issued $7.1 million in principal amount of
Subordinated Extendible Debentures due April 1, 2000, Series C (11%) (the
"Series C Debentures") in an underwritten public offering. The annual interest
rate of the Series C Debentures may be adjusted at the sole discretion of the
Company on April 1, 1995 and on each April 1 thereafter until maturity in 2000.
The Company reset the interest rate on the Series C Debentures to 13% for the
period April 1, 1995 through March 31, 1996. The Series C Debentures were
redeemable on April 1, 1995 and will be redeemable on each April 1 thereafter
until maturity, in
23
<PAGE>
whole or in part, at the option of the holder or the Company for the principal
amount thereof plus accrued interest through the date of redemption. On April 1,
1995, $4.4 million of Series C Debentures were redeemed at the holders' option.
The 11 1/4% Convertible Senior Subordinated Debentures due October 1, 1997
are convertible at any time prior to maturity into common stock of the Company
at $6.69 per share (subject to antidilutive provisions of the indenture).
Interest is payable semiannually. The 11 1/4% Debentures are not subject to a
sinking fund while the Company maintains a positive, tangible net worth. The
payment of the principal and interest on the 11 1/4% Debentures is subordinated
in right of payment to the prior payment in full of all senior indebtedness of
the Company as defined in the indenture.
Interest paid on subordinated debentures in 1995, 1994 and 1993 was
$3,984,000, $3,886,000 and $2,214,000, respectively.
6. Stock Options and Stock Purchase Rights
At November 3, 1995, options to purchase previously unissued shares of
common stock were outstanding under stock option plans. Payment for shares
purchased upon exercise of an option granted under these plans may be made
either in cash or in common stock of the Company.
Information with respect to stock options outstanding is as follows:
<TABLE>
<CAPTION>
Number Option Price
of Shares Per Share
<S> <C> <C>
October 30, 1992 538,030 $5.25 to $10.75
Granted 3,800 $6.875
Exercised (12,500 ) $5.25 to $ 5.56
Canceled (50,000 ) $6.31 to $ 6.81
October 29, 1993 479,330 $5.31 to $10.75
Canceled (112,842 ) $5.44 to $10.75
October 28, 1994 366,488 $5.31 to $ 9.13
Granted 225,000 $2.81 to $ 4.43
Canceled (297,573 ) $5.31 to $ 9.13
November 3, 1995 293,915 $2.81 to $ 8.13
</TABLE>
Options on 53,390 shares, 239,880 shares and 232,407 shares were exercisable
at November 3, 1995, October 28, 1994 and October 29, 1993, respectively. Under
the plans, 564,184 shares, 491,611 shares and 378,769 shares of common stock
were available for the granting of additional options at November 3, 1995,
October 28, 1994 and October 29, 1993, respectively.
Effective July 22, 1988, the Board of Directors of the Company adopted a
Rights Agreement and approved the distribution to stockholders of record on
August 9, 1988 of one Preferred Share Purchase Right ("Right") for each
outstanding share of the Company's common stock. Each Right, when exercisable,
generally entitles common stockholders to purchase one one-hundredth of a share
of a new series of preferred stock, designated as Series A Junior Participating
Preferred Stock, at a price of $30. The Rights will generally be exercisable and
transferable apart from the Company's common stock upon acquisition by a person
or group of 30% or more of the Company's common stock (amended by the Board of
Directors in 1994 to change 15% to 30%), the announcement of a tender offer for
20% or more of the Company's common stock or a determination by the Board of
Directors that any holder of 12% or more of the Company's common stock is an
"adverse person." The Rights will expire on August 9, 1998, unless such date is
extended by the Company's Board of Directors or the Rights are redeemed prior to
that time.
24
<PAGE>
7. Common Stockholders' Equity
At November 3, 1995, shares of common stock were reserved for possible
issuance as follows:
<TABLE>
<S> <C>
Conversion of 11 1/4% Convertible Senior Subordinated Debentures (Note 5) 528,647
Stock options (Note 6) 858,099
Stock options granted to Chadbourne Corp. 600,000
1990 Executive Stock Purchase Plan 186,565
Directors' Deferred Stock Compensation Plan 162,791
Total 2,336,102
</TABLE>
Primary and fully diluted earnings (loss) per common share have been
computed on the basis of weighted average number of shares of common stock and
common stock equivalents (when not antidilutive) outstanding as follows:
<TABLE>
<CAPTION>
Primary Fully Diluted
<S> <C> <C>
1995 8,651,668 8,651,668
1994 8,107,507 8,107,507
1993 7,675,806 7,675,806
</TABLE>
8. Redeemable Preferred Stock
In October of 1993, the Company redeemed all outstanding shares of its
preferred stock and all of the outstanding Series A and Series B Subordinated
Debentures with a portion of the net proceeds of its September 8, 1993 issue of
8 3/4% Senior Subordinated Debentures due August 1, 1999 (Note 5).
9. Income Taxes
As of November 3, 1995, the Company had net operating loss carryforwards of
$44.8 million for income tax purposes which are available through the year 2010.
For financial reporting purposes, a valuation allowance of $15.7 million has
been recognized to offset the deferred tax asset related to these carryforwards.
The Company has Alternative Minimum Tax credits totaling $377,000 and Investment
Tax credits of $29,000 available to reduce income taxes payable in future
periods. The Investment Tax credits expire during 1996 through 2001.
Deferred income tax expense results from temporary differences related
primarily to net operating loss carryforwards. Significant components of the
Company's deferred tax asset as of November 3, 1995 and October 28, 1994 are as
follows:
[CAPTION]
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
(in thousands)
<S> <C> <C>
Deferred Tax Liability:
Tax over book amortization $ 769 $ 2,004
Deferred Tax Asset:
Net operating loss carryforwards $ 15,692 $ 10,080
Allowance for bad debts 477 1,500
Contribution rollover 22 12
Lawsuit settlement 292 525
Total deferred tax assets 16,483 12,117
Valuation Allowance (15,714) (10,113)
Net Deferred tax assets 769 2,004
Net deferred tax liability $ -- $ --
</TABLE>
Income taxes paid in 1995, 1994 and 1993 were $-0-, $-0-, and $465,000,
respectively.
25
<PAGE>
10. Employee Benefit Plans
The Company maintains a defined contribution plan (401(k)) covering
substantially all employees who have completed six months of service. The plan
requires the Company to match up to $150 per year for each participating
employee's contributions. Discretionary Company contributions are determined
annually by the Board of Directors based on results of operations. These
discretionary contributions may either match employee amounts or represent fixed
amounts. The Company contributed approximately $146,000, $215,000, and $304,000
in 1995, 1994 and 1993, respectively.
11. Rental Expense and Lease Obligations
Rental expense is summarized as follows:
[CAPTION]
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
(in thousands)
<S> <C> <C> <C>
Gross rentals $4,380 $5,086 $4,910
Less sublease rentals 371 152 180
Rental expense, net $4,009 $4,934 $4,730
</TABLE>
Future obligations for minimum rentals under operating leases and capital
leases that have initial or remaining noncancellable lease terms in excess of
one year at November 3, 1995 and rentals to be received under noncancellable
subleases are as follows:
<TABLE>
<CAPTION>
Operating Leases Net
Minimum Sublease Minimum Capital
Fiscal Year Rentals Rentals Rentals Leases
<S> <C> <C> <C> <C>
<CAPTION>
(in thousands)
<S> <C> <C> <C> <C>
1996 3,501 258 3,243 72
1997 2,399 133 2,266 72
1998 1,338 97 1,241 72
1999 1,174 79 1,095 72
2000 947 79 868 72
Later years 2,369 337 2,032 557
Total minimum lease payments $11,728 $983 $10,745 $ 917
Amounts representing interest (412)
Present value of net minimum lease payments $ 505
</TABLE>
Certain operating leases contain renewal options ranging from one to five
years and/or contain purchase options, generally approximating fair market
value.
12. Contingent Liabilities and Commitments
The Company is involved in various litigation arising during the ordinary
course of business. The final outcome of this litigation cannot be determined;
however, it is management's opinion that the final resolution of these matters
will not have a material adverse effect on the Company's financial position and
future liquidity.
26
<PAGE>
13. Industry Segments
The Company operates in two industry segments: the manufacture and sale of
textiles and the manufacture and sale of apparel. Within the textile segment,
the Company is engaged primarily in the development, production and sale of
finished fabrics and elastic narrow fabrics for the home furnishing, automotive,
medical and various apparel markets. Within the apparel segment, the Company is
engaged principally in the development, production and sale of T-shirts. Sales
by these product groups accounted for 60.4%, 11.7%, and 27.9%, respectively, of
total 1995 sales; 61.9%, 12.5%, and 25.6%, respectively, of total 1994 sales;
and 60.3%, 11.2% and 28.5%, respectively, of total 1993 sales to unaffiliated
customers.
The following summarizes certain information on industry segments:
[CAPTION]
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
(in thousands)
<S> <C> <C> <C>
Net Sales(1)
Textiles:
Unaffiliated customers $185,685 $162,301 $169,625
Intersegment 1 130 422
185,686 162,431 170,047
Apparel:
Unaffiliated customers 71,842 55,796 67,640
Intersegment 0 36 16,393
71,842 55,832 84,033
Intersegment eliminations (1) (166) (16,815)
Total Net Sales $257,527 $218,097 $237,265
Operating Profit (Loss)(1)
Textiles $ 11,485 $ 6,436 $ 9,419
Apparel 1,239 689 (1,115)
Total Operating Profit 12,724 7,125 8,304
Interest Expense 12,116 10,713 10,190
Other Income (Expense) 22 1,596 (2,000)
Net Income (Loss) From Continuing Operations $ 630 $ (1,992) $ (3,886)
Identifiable Assets
Textiles $ 57,391 $ 97,798 $122,102
Apparel 38,654 39,382 27,558
Total $ 96,045 $137,180 $149,660
Depreciation & Amortization
Textiles $ 7,028 $ 8,284 $ 8,338
Apparel 2,119 2,721 2,075
Total $ 9,147 $ 11,005 $ 10,413
Capital Expenditures:
Textiles $ 1,348 $ 2,370 $ 7,502
Apparel 1,618 963 2,552
Total $ 2,966 $ 3,333 $ 10,054
</TABLE>
(1) Balances for fiscal 1994 and 1993 have been restated to exclude
discontinued operations.
27
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Information with respect to Directors, appearing under the heading
"Election of Directors" on pages 5 through 8 of the Registrant's definitive
proxy statement for the Annual Meeting of Stockholders to be held on March 12,
1996, is incorporated herein by reference. Information regarding executive
officers is included as Item 4A in Part I of this document.
Item 11. Executive Compensation.
Information with respect to executive compensation, appearing under the
heading "Executive Compensation" on pages 8 through 16 of the Registrant's
definitive proxy statement for the Annual Meeting of Stockholders to be held on
March 12, 1996, is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Information with respect to security ownership of certain beneficial owners
and management, appearing under the headings "Security Ownership of Certain
Beneficial Owners" and "Security Ownership of Management" on pages 1 through 5
of the Registrant's definitive proxy statement for the Annual Meeting of
Stockholders to be held on March 12, 1996, is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
Information with respect to certain relationships and related transactions,
appearing under the headings "Employment and Other Related Agreements" and
"Certain Transactions" on pages 15 and 16 of the Registrant's definitive proxy
statement for the Annual Meeting of Stockholders to be held on March 12, 1996,
is incorporated herein by reference.
28
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a)(1) and (2) Financial Statements and Schedule
The financial statements and supplemental schedule
listed in the accompanying index to financial
statements and schedule are filed as part of this
document.
(3) Exhibits
Exhibits to this report are listed in the accompanying index
to exhibits.
(b) No reports on Form 8-K were filed during the Company's 1995 fourth
fiscal quarter.
29
<PAGE>
SIGNATURES
Pursuant to the requirements of Sections 13 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.
TEXFI INDUSTRIES, INC.
Date: February 1, 1996 By:s/Richard L. Kramer
-------------------
Richard L. Kramer
Chairman of the Board
of Directors
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
s/Richard L. Kramer
- ------------------------
Richard L. Kramer Chairman of the Board of February 1, 1996
Directors
s/William L. Remley
William L. Remley Chief Executive Officer February 1, 1996
and Vice Chairman of the
Board of Directors
s/Andrew J. Parise, Jr.
- ------------------------
Andrew J. Parise, Jr. President and Chief February 1, 1996
Operating Officer
s/John S. Rainey
John S. Rainey Director February 1, 1996
s/Braxton Schell
Braxton Schell Director February 1, 1996
s/William D. Goldston, Jr.
William D. Goldston, Jr. Director February 1, 1996
s/John D. Mazzuto
John D. Mazzuto Director February 1, 1996
s/Dane L. Vincent
Dane L. Vincent Chief Financial Officer February 1, 1996
and Treasurer (Principal
Accounting and
Financial Officer)
</TABLE>
30
<PAGE>
FORM 10-K -- ITEMS 8, 14(a)(1) and (2) and ITEM 14(d)
TEXFI INDUSTRIES, INC.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
I - Report of Independent Auditors Relating to Consolidated Financial F-2
Statements and Supplemental Schedule of Texfi Industries, Inc.
II - Valuation and Qualifying Accounts F-3
Other schedules are omitted because of the absence of the conditions under which
they are required or because the required information is included in the
consolidated financial statements or in the notes thereto.
F-1
<PAGE>
REPORT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS
Stockholders and Board of Directors
Texfi Industries, Inc.
We have audited the accompanying consolidated balance sheets of Texfi
Industries, Inc. and subsidiary as of November 3, 1995 and October 28, 1994 and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the three years in the period ended November 3, 1995. Our
audits also included the financial statement schedule listed in the Index as
Item 14(a). These financial statements and schedule are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and schedule 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 consolidated financial position of Texfi
Industries, Inc. and subsidiary at November 3, 1995 and October 28, 1994 and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended November 3, 1995, in conformity with generally
accepted accounting principles. Also, in our opinion, the related financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
ERNST AND YOUNG LLP
Raleigh, North Carolina
December 7, 1995
F-2
<PAGE>
SCHEDULE II
TEXFI INDUSTRIES, INC.
Analysis of Valuation and Qualifying Accounts for the
Fiscal Years Ended November 3, 1995,
October 28, 1994 and October 29, 1993
(Amounts in thousands)
Fiscal Year
1995 1994 1993
------ ------ -----
RESERVES DEDUCTED FROM ASSETS
TO WHICH THEY APPLY:
Allowance for doubtful accounts and claims:
Balance at beginning of year .............. $4,287 $3,616 $1,491
Net additions charged to income:
Doubtful accounts........................ 526 384 2,514
Claims and allowances.................... 2,670 2,184 561
------ ----- -----
3,196 2,568 3,075
Deductions for accounts written off as
uncollectible (net of recoveries) ....... 6,121 1,897 950
------ ----- -----
Balance at end of year .................... $1,362 $4,287 $3,616
====== ====== ======
F-3
<PAGE>
TEXFI INDUSTRIES, INC.
INDEX TO EXHIBITS
*2(a) Asset Purchase Agreement dated as of February 10, 1995, by and
between Registrant and Marion, Inc. filed as Exhibit 2(a) to
Registrant's Form 8-K Current Report dated March 31, 1995.
*2(b) Amendment to Asset Purchase Agreement dated as of February 10,
1995, filed as Exhibit 2(b) to Registrant's Form 8-K Current
Report dated March 31, 1995.
*2(c) Assignment and Assumption of Asset Purchase Agreement dated as
of March 31, 1995 by and between Marion, Inc. and Decotech,
L.C., filed as Exhibit 2(c) to Registrant's Form 8-K Current
Report dated March 31, 1995.
*2(d) Subordinated Promissory Note dated March 31, 1995 from
Decotech, L.C. in the principal amount of $2,000,000, filed as
Exhibit 2(d) to Registrant's Form 8-K Current Report dated
March 31, 1995.
*2(e) Subordinated Promissory Note dated March 31, 1995 from
Decotech, L.C. in the principal amount of $300,000 filed as
Exhibit 2(e) to Registrant's Form 8-K Current Report dated
March 31, 1995.
*2(f) Subordination Agreement dated as of March 31, 1995 by and
between BNY Financial Corporation, Decotech, L.C. and
Registrant with respect to $2,000,000 promissory note, filed
as Exhibit 2(f) to Registrant's Form 8-K Current Report dated
March 31, 1995.
*2(g) Subordination Agreement dated as of March 31, 1995 by and
between BNY Financial Corporation, Decotech, L.C. and
Registrant with respect to $300,000 promissory note, filed as
Exhibit 2(g) to Registrant's Form 8-K Current Report dated
March 31, 1995.
2(h) Agreement dated as of September 8, 1995 between Registrant and
Decotech, L.C.
2(i) Note Purchase Agreement dated as of September 8, 1995 between
Registrant, Decotech, L.C. and Deco General Partnership.
*3(a)(1) Restated Certificate of Incorporation of Registrant dated
August 13, 1969, filed as Exhibit (3)(a)(1) to Registrant's
Form 10-K Annual Report for the fiscal year ended October 31,
1980.
*3(a)(2) Certificate of Amendment of Certificate of Incorporation of
Registrant dated March 16, 1972, filed as Exhibit (3)(a)(2)to
Registrant's Form 10-K Annual Report for the fiscal year ended
October 31, 1980.
*3(a)(3) Certificate of Amendment of Certificate of Incorporation of
Registrant dated March 27, 1978, filed as Exhibit (3)(a)(3) to
Registrant's Form 10-K Annual Report for the fiscal year ended
October 31, 1980.
*3(a)(4) Certificate of Amendment of Certificate of Incorporation of
Registrant dated May 19, 1986, filed as Exhibit 4.4 to
Registrant's Form S-8 Registration Statement (No. 33-14697).
1
<PAGE>
*3(a)(5) Certificate of Amendment of Certificate of Incorporation of
Registrant dated March 20, 1987, filed as Exhibit 4.5 to
Registrant's Form S-8 Registration Statement (No. 33-14697).
*3(a)(6) Certificate of Amendment of Certificate of Incorporation of
Registrant dated September 28, 1987, filed as Exhibit 4(a)(6)
to Registrant's Form S-2 Registration Statement (No.
33-16794).
*3(a)(7) Certificate of Designations of Registrant dated November 20,
1987, filed as Exhibit 4(a)(7) to Registrant's Form S-2
Registration Statement (No. 33-16794).
*3(a)(8) Certificate of Designations of Registrant dated March 8, 1988,
filed as Exhibit 4(a)(8) to Registrant's Form S-2 Registration
Statement (No. 33-20131).
*3(a)(9) Certificate of Designations of Registrant dated August 4,
1988, filed as Exhibit 4(d)(9) to Registrant's Form 10-Q
Quarterly Report for the fiscal quarter ended July 29, 1988.
*3(b)(1) Bylaws of Registrant, filed as Exhibit 4.6 to Registrant's
Form S-8 Registration Statement (No. 33-14697).
*3(b)(2) Amendment to Bylaws of Registrant, filed as Exhibit 4(b)(2) to
Registrant's Form S-2 Registration Statement (No. 33-16794).
*3(b)(3) Amendment to Bylaws of Registrant adopted by Registrant's
Board of Directors on January 18, 1991, filed as Exhibit
3(b)(3) to Registrant's Form 10-K Annual Report for the fiscal
year ended November 2, 1990.
*3(b)(4) Amendment to Bylaws of Registrant adopted by Registrant's
Board of Directors on August 31, 1994, filed as Exhibit
4(b)(4) to Registrant's Form 10-Q Quarterly Report for the
fiscal quarter ended July 29, 1994.
*3(b)(5) Amendment to Bylaws of Registrant adopted by Registrant's
Board of Directors on September 7, 1994, filed as Exhibit
4(b)(5) to Registrant's Form 10-Q Quarterly Report for the
fiscal quarter ended July 29, 1994.
*4(a)(1) Indenture between Registrant and Rhode Island Hospital Trust
National Bank, Trustee, with a copy of Subordinated Debentures
due April 1, 1995, Series A, Subordinated Debentures due April
1, 1995, Series B and Subordinated Extendible Debentures due
April 1, 2000, Series C attached, filed as Exhibit 4(f) to
Registrant's Form S-2 Registration Statement (No. 33-32485).
*4(a)(2) First Supplemental Indenture between Registrant and Rhode
Island Hospital Trust National Bank, Trustee, with a revised
Subordinated Debenture due April 1, 1995, Series B attached,
filed as Exhibit 4 to Registrant's Form 8-K Current Form dated
May 16, 1990.
2
<PAGE>
*4(a)(3) Indenture dated October 1, 1991 between Registrant and First
National Bank of Boston, Trustee, with copy of 11-1/4%
Convertible Senior Subordinated Debenture due October 1, 1997,
filed as Exhibit 4(a)(1) to Registrant's Form 10-K Annual
Report for the fiscal year ended November 1, 1991.
*4(a)(4) Indenture dated September 8, 1993 between Registrant and First
Union National Bank of North Carolina, Trustee, with copy of
8-3/4% Senior Subordinated Debenture due August 1, 1999, filed
as Exhibit 4(c)(2) to Registrant's Form 10-Q Quarterly Report
for the fiscal quarter ended July 30, 1993.
*4(b)(1) Specimen Common Stock ($1 par value) certificates, filed as
Exhibit 4.01 to Amendment No. 2 to Registrant's Form S-1
Registration Statement (No. 2-41653).
*4(c)(1) Rights Agreement dated July 22, 1988 between Registrant and
First Union National Bank of North Carolina, as Rights Agent,
filed as Exhibit 1 to Registrant's Form 8-K Current Form dated
July 22, 1988.
*4(c)(2) Form of Rights Certificate, filed as Exhibit B to Exhibit 1 to
Registrant's Form 8-K Current Form dated July 22, 1988.
*4(c)(3) Amendment to Rights Agreement between Registrant and First
Union National Bank of North Carolina dated October 31, 1988,
filed as Exhibit 4(e)(3) to Registrant's Form S-2 Registration
Statement (No. 33-32485).
*4(c)(4) Second Amendment to Rights Agreement dated May 24, 1994
between Registrant and First Union National Bank of North
Carolina, as Rights Agent, filed as Exhibit 4(e)(4) to
Registrant's Form 10-Q Quarterly Report for the fiscal quarter
ended April 29, 1994.
*4(c)(5) Third Amendment to Rights Agreement dated December 16, 1994
between Registrant and First Union National Bank of North
Carolina, as Rights Agent, filed as Exhibit 4(c)(5) to
Registrant's Form 10-K Annual Report for the fiscal year ended
October 28, 1994.
*4(d)(1) Loan Agreement dated October 29, 1990 between Registrant and
NCNB National Bank of North Carolina, filed as Exhibit 2(a) to
Registrant's Form 8-K Current Form dated November 12, 1990.
*4(d)(2) First Amendment to Loan Agreement dated March 14, 1991 between
Registrant and NCNB National Bank of North Carolina, filed as
Exhibit 19(a)(1) to Registrant's Form 10-Q Quarterly Report
for the fiscal quarter ended May 3, 1991.
*4(d)(3) Second Amendment to Loan Agreement dated March 28, 1991
between Registrant and NCNB National Bank of North Carolina,
filed as Exhibit 19(a)(2) to Registrant's Form 10-Q Quarterly
Report for the fiscal quarter ended May 3, 1991.
3
<PAGE>
*4(d)(4) Third Amendment to Loan Agreement dated May 29, 1991 between
Registrant and NCNB National Bank of North Carolina, filed as
Exhibit 19(a)(3) to Registrant's Form 10-Q Quarterly Report
for the fiscal quarter ended May 3, 1991.
*4(d)(5) Fourth Amendment to Loan Agreement dated June 14, 1991 between
Registrant and NCNB National Bank of North Carolina, filed as
Exhibit 19(a)(4) to Registrant's Form 10-Q Quarterly Report
for the fiscal quarter ended May 3, 1991.
*4(d)(6) Fifth Amendment to Loan Agreement dated January 28, 1992
between Registrant and NCNB National Bank of North Carolina,
filed as Exhibit 4(e)(6) to Registrant's Form 10-K Annual
Report for the fiscal year ended November 1, 1991.
*4(d)(7) Sixth Amendment to Loan Agreement dated November 4, 1992
between Registrant and NationsBank of North Carolina, N.A.
(formerly NCNB National Bank of North Carolina), filed as
Exhibit 4(e)(7) to Registrant's Form 10-K Annual Report for
the fiscal year ended October 30, 1992.
*4(d)(8) Seventh Amendment to Loan Agreement dated December 22, 1992
between Registrant and NationsBank of North Carolina, N.A.
(formerly NCNB National Bank of North Carolina), filed as
Exhibit 4(e)(8) to Registrant's Form 10-K Annual Report for
the fiscal year ended October 30, 1992.
*4(d)(9) Eighth Amendment to Loan Agreement dated August 25, 1993
between Registrant and NationsBank of North Carolina, N.A.
(formerly NCNB National Bank of North Carolina), filed as
Exhibit 4(g)(9) to Registrant's Form S-2 Registration
Statement (No. 33-66678).
*4(d)(10) Ninth Amendment to Loan Agreement dated October 29, 1993
between Registrant and NationsBank of North Carolina, N.A.
(formerly NCNB National Bank of North Carolina), filed as
Exhibit 4(f)(10) to Registrant's Form 10-K Annual Report for
the fiscal year ended October 29, 1993.
*4(d)(11) Tenth Amendment to Loan Agreement dated April 28, 1994 between
Registrant and NationsBank of North Carolina, N.A. (formerly
NCNB National Bank of North Carolina), filed as Exhibit
4(f)(11) to Registrant's Form 10-Q Quarterly Report for the
fiscal quarter ended April 29, 1994.
*4(d)(12) Eleventh Amendment to Loan Agreement dated October 28, 1994
between Registrant and NationsBank of North Carolina, N.A.
(formerly NCNB National Bank of North Carolina) filed as
Exhibit 4(d)(12) to Registrant's Form 10-K Annual Report for
the fiscal year ended October 28, 1994.
*4(d)(13) Twelfth Amendment to Loan Agreement dated January 27, 1995
between Registrant and NationsBank of North Carolina, N.A.
(formerly NCNB National Bank of North Carolina), filed as
Exhibit 4(d)(13) to Registrant's Form 10-Q Quarterly Report
for the fiscal quarter ended January 27, 1995.
4
<PAGE>
*4(d)(14) Thirteenth Amendment to Loan Agreement dated April 28, 1995
between Registrant and NationsBank of North Carolina, N.A.
(formerly NCNB National Bank of North Carolina),filed as
Exhibit 4(f)(14) to Registrant's Form 10-Q Quarterly Report
for the fiscal quarter ended April 28, 1995.
*4(d)(15) Fourteenth Amendment to Loan Agreement dated July 28, 1995
between Registrant and NationsBank of North Carolina, N.A.
(formerly NCNB National Bank of North Carolina)filed as
Exhibit 4(f)(15) to Registrant's Form 10-Q Quarterly Report
for the fiscal quarter ended July 28, 1995.
4(d)(16) Fifteenth Amendment to Loan Agreement dated November 3, 1995
between Registrant and NationsBank of North Carolina, N.A.
(formerly NCNB National Bank of North Carolina).
Management contract or compensatory plan or arrangement (Exhibits 10(a)(1)
through 10(a)(23))
*10(a)(1) Supplemental Retirement Agreement dated September 1, 1981
between Registrant and Joseph H. Hamilton, filed as Exhibit
10(b) to Registrant's Form 10-K Annual Report for the fiscal
year ended October 30, 1981.
*10(a)(2) 1987 Nonqualified Stock Option Plan, as adopted by
Registrant's Board of Directors on December 16, 1987 and
approved March 8, 1988 at a meeting of Registrant's
Stockholders, filed as Exhibit 4(c)(11) to Registrant's Form
10-Q Quarterly Report for the fiscal quarter ended April 29,
1988.
*10(a)(3) Form of 1987 Nonqualified Stock Option Agreement, filed as
Exhibit 4(c)(12) to Registrant's Form 10-Q Quarterly Report
for the fiscal quarter ended April 29, 1988.
*10(a)(4) Resolutions amending the 1987 Nonqualified Stock Option Plan,
as adopted by Registrant's Board of Directors on January 8,
1991 and Registrant's Stockholders on March 12, 1991, filed as
Exhibit 10(a)(9) to Registrant's Form 10-K Annual Report for
the fiscal year ended November 1, 1991.
*10(a)(5) Resolutions amending the 1987 Nonqualified Stock Option Plan,
as adopted by Registrant's Board of Directors on January 12,
1993 and Registrant's Stockholders on March 9, 1993, filed as
Exhibit 19(f) to Registrant's Form 10-Q Quarterly Report for
the fiscal quarter ended April 30, 1993.
10(a)(6) Resolution amending the 1987 Nonqualified Stock Option Plan,
as adopted by Registrant's Board of Directors on September 6,
1995.
10(a)(7) Form of 1987 Nonqualified Stock Option Agreements dated May
18, 1995 between William L. Remley and Andrew J. Parise, Jr.
and Registrant.
*10(a)(8) Directors' Deferred Stock Compensation Plan as adopted by
Registrant's Board of Directors on July 14, 1989, filed as
Exhibit 19 to Registrant's Form 10-Q Quarterly Report for the
fiscal quarter ended July 28, 1989.
5
<PAGE>
*10(a)(9) Resolutions amending the Directors' Deferred Stock
Compensation Plan as adopted by Registrant's Board of
Directors on November 30, 1994 and Registrant's Stockholders
on March 14, 1995, filed as Exhibit 10(a)(7) to the
Registrant's Form 10-Q Quarterly Report for the fiscal quarter
ended April 28, 1995.
10(a)(10) Resolution amending Directors' Deferred Stock Compensation
Plan, as adopted by the Directors' Deferred Stock Compensation
Committee of Registrant's Board of Directors on September 6,
1995.
*10(a)(11) 1990 Executive Stock Purchase Plan, dated January 9, 1990,
filed as Exhibit 4(d)(16) to Registrant's Form 10-Q Quarterly
Report for the fiscal quarter ended February 2, 1990.
*10(a)(12) Resolutions amending the 1990 Executive Stock Purchase Plan,
as adopted by Registrant's Board of Directors on March 9,
1993, filed as Exhibit 19(g) to Registrant's Form 10-Q
Quarterly Report for the quarter ended April 30, 1993.
10(a)(13) Resolution amending 1990 Executive Stock Purchase Plan, as
adopted by Registrant's Board of Directors on September 6,
1995.
*10(a)(14) 1990 Restricted Incentive Stock Plan, dated January 9, 1990,
filed as Exhibit 4(d)(17) to Registrant's Form 10-Q Quarterly
Report for the fiscal quarter ended February 2, 1990
(terminated in 1995 except as to previously issued stock).
*10(a)(15) Employment Agreement dated November 1, 1991 between Registrant
and L. Terrell Sovey, Jr., filed as Exhibit 10(a)(21) to
Registrant's Form 10-K Annual Report for the fiscal year ended
October 30, 1992.
10(a)(16) Letter Agreement dated March 20, 1995 between Registrant and
L. Terrell Sovey, Jr.
*10(a)(17) Employment Agreement dated November 17, 1992 between
Registrant and Michael A. Miller, filed as Exhibit 10(a)(26)
to Registrant's Form 10-K Annual Report for the fiscal year
ended October 30, 1992.
*10(a)(18) Amendment to Employment Agreement dated January 29, 1993
between Registrant and Michael A. Miller, filed as Exhibit
19(d) to Registrant's Form 10-Q Quarterly Report for the
fiscal quarter ended April 30, 1993.
*10(a)(19) Employment Agreement dated October 31, 1994 between Registrant
and Andrew J. Parise, Jr., filed as Exhibit 10(a)(23) to
Registrant's Form 10-K Annual Report for the fiscal year ended
October 28, 1994.
*10(a)(20) Description of Registrant's 1994 Management Incentive
Compensation Plan adopted by Registrant's Board of Directors
on February 15, 1994, filed as Exhibit 10(a)(24) to
Registrant's Form 10-K Annual Report for the year ended
October 28, 1994 (terminated as to Messrs. Remley, Parise,
Vincent, Courtney and Gilreath in 1995).
6
<PAGE>
*10(a)(21) Description of Registrant's Target Ownership Program adopted
by Registrant's Board of Directors on February 15, 1994, filed
as Exhibit 10(a)(25) to Registrant's From 10-K Annual Report
for the fiscal year ended October 28, 1994 (terminated in
1995).
*10(a)(22) Employment Agreement dated April 1, 1995 between Registrant
and William L. Remley, filed as Exhibit 10(a)17 to
Registrant's Form 10-Q Quarterly Report for the fiscal quarter
ended April 28, 1995.
10(a)(23) Performance Incentive Plan adopted by Registrant's Board of
Directors on September 6, 1995.
*10(b)(1) Deed of Trust and Security Agreement dated September 15, 1989
between Elastex, Inc., Eugene M. Anderson, Jr. and
BarclaysAmerican/Commercial, Inc., filed as Exhibit 10(e)(4)
to Registrant's Form S-2 Registration Statement (No.
33-32485).
*10(b)(2) First Supplement to Deed of Trust dated September 15, 1989
among Elastex, Inc., Eugene M. Anderson, Jr. and
BarclaysAmerican Commercial, Inc., filed as Exhibit 10(e)(5)
to Registrant's Form S-2 Registration Statement (No.
33-32485).
*10(b)(3) Assignment of Leases and Rents dated September 15, 1989 by
Elastex, Inc. in favor of BarclaysAmerican/Commercial, Inc.,
filed as Exhibit 10(e)(6) to Registrant's Form S-2
Registration Statement (No. 33-32485).
*10(b)(4) Security Agreement (Equipment and Machinery) dated July 24,
1987 by Elastex, Inc. in favor of BarclaysAmerican/
Commercial, Inc., filed as Exhibit 10(e)(7) to Registrant's
Form S-2 Registration Statement (No. 33-32485).
*10(b)(5) Amendment to Security Agreement dated September 15, 1989
between Elastex, Inc. and BarclaysAmerican/Commercial, Inc.,
filed as Exhibit 10(e)(8) to Registrant's Form S-2
Registration Statement (No. 33-32485).
*10(b)(6) Term Loan Agreement dated October 30, 1992 between Registrant
and Barclays Commercial Corporation, filed as Exhibit 10(c)(9)
to the Registrant's Form 10-K Annual Report for the fiscal
year ended October 30, 1992.
*10(b)(7) Amendment to Term Loan Agreement dated August 25, 1993 between
Registrant and Barclays Commercial Corporation, filed as
Exhibit 10(c)(10) to Registrant's Form S-2 Registration
Statement (No. 33-66678).
*10(b)(8) Amendment to Term Loan Agreement dated December 29, 1993
between Registrant and Barclays Commercial Corporation, filed
as Exhibit 10(b)(11) to Registrant's Form 10-K Annual Report
for the fiscal year ended October 29, 1993.
*10(b)(9) Amendment to Term Loan Agreement dated May 25, 1994 between
Registrant and The CIT Group/BCC, Inc. (formerly Barclays
Commercial Corporation), filed as Exhibit 10(b)(12) to
Registrant's Form 10-Q Quarterly Report for the fiscal quarter
ended April 29, 1994.
7
<PAGE>
*10(b)(10) Amendment to Term Loan Agreement dated October 28, 1994
between Registrant and The CIT Group/BCC, Inc. (formerly
Barclays Commercial Corporation), filed as Exhibit 10(b)(13)
to Registrant's Form 10-K Annual Report for the fiscal year
ended October 28, 1994.
*10(b)(11) Amendment to Term Loan Agreement dated January 27, 1995
between Registrant and The CIT Group/BCC, Inc. (formerly
Barclays Commercial Corporation) filed as Exhibit 10(b)(14) to
Registrant's Form 10-Q Quarterly Report for the fiscal quarter
ended January 27, 1995.
*10(b)(12) Inventory Security Agreement dated February 1, 1995 between
Registrant and The CIT Group/Commercial Services, Inc.
(formerly Barclays Commercial Corporation), filed as Exhibit
10(b)(15) to the Registrant's Form 10-Q Quarterly Report for
the fiscal quarter ended January 27, 1995.
*10(b)(13) Inventory Security Agreement dated March 31, 1995 between
Registrant and The CIT Group/Commercial Services, Inc.
(formerly Barclays Commercial Corporation), filed as Exhibit
10(b) (17) to Registrant's Form 10-Q Quarterly Report for the
fiscal quarter ended April 28, 1995.
*10(b)(14) Amendment to Term Loan Agreement dated April 28, 1995 between
Registrant and The CIT Group/BCC, Inc. (formerly Barclays
Commercial Corporation), filed as Exhibit 10(b)(15) to
Registrant's Form 10-Q Quarterly Report for the fiscal quarter
ended April 28, 1995.
*10(b)(15) Amendment to Term Loan Agreement dated July 28, 1995 between
Registrant and The CIT Group/BCC, Inc. (formerly Barclays
Commercial Corporation), filed as Exhibit (10)(a)(1) to
Registrant's Form 10-Q Quarterly Report for the fiscal quarter
ended July 28, 1995.
10(b)(16) Amendment to Term Loan Agreement effective November 3, 1995
between Registrant and The CIT Group/BCC, Inc. (formerly
Barclays Commercial Corporation).
*10(b)(17) Security Agreement dated October 30, 1992 between Registrant
and Barclays Commercial Corporation, filed as Exhibit
10(c)(11) to Registrant's Form 10-K Annual Report for the
fiscal year ended October 30, 1992.
*10(b)(18) First Supplement to Deed of Trust and Security Agreement dated
October 30, 1992 between Registrant and Barclays Commercial
Corporation, filed as Exhibit 10(c)(12) to Registrant's Form
10-K Annual Report for the fiscal year ended October 30, 1992.
*10(b)(19) Second Supplement to Deed of Trust and Security Agreement
dated October 30, 1992 between Registrant and Barclays
Commercial Corporation, filed as Exhibit 10(c)(13) to
Registrant's Form 10-K Annual Report for the fiscal year ended
October 30, 1992.
8
<PAGE>
*10(b)(20) Modification of Deed to secure Debt dated October 30, 1992
between Registrant and Barclays Commercial Corporation, filed
as Exhibit 10(c)(14) to Registrant's Form 10-K Annual Report
for the fiscal year ended October 30, 1992.
*10(b)(21) Master Loan and Security Agreement dated June 1, 1993 between
Registrant and BOT Financial Corporation and related
Promissory Note dated June 4, 1993 between Registrant and BOT
Financial Corporation, filed as Exhibit 19(h) to Registrant's
Form 10-Q Quarterly Report for the fiscal quarter ended April
30, 1993.
*10(b)(22) Loan Schedule No. 2 to Master Loan and Security Agreement and
related Promissory Note and Supplemental Security Agreement
dated July 30, 1993 between Registrant and BOT Financial
Corporation, filed as Exhibit 10(b)(19) to Registrant's Form
10-K Annual Report for the fiscal year ended October 29, 1993.
*10(b)(23) Loan Schedule No. 3 to Master Loan and Security Agreement and
related Promissory Note and Supplemental Security Agreement
dated October 29, 1993 between Registrant and BOT Financial
Corporation, filed as Exhibit 10(b)(20) to Registrant's Form
10-K Annual Report for the fiscal year ended October 29, 1993.
*10(b)(24) Master Loan and Security Agreement dated June 1, 1993 between
Registrant and KeyCorp. Leasing Ltd. and related Promissory
Note dated June 4, 1993 between Registrant and KeyCorp.
Leasing Ltd., filed as Exhibit 19(i) to Registrant's Form 10-Q
Quarterly Report for the fiscal quarter ended April 30, 1993.
10(c)(1) Loan Agreement dated October 29, 1990 and Amendments thereto
between Registrant and NCNB National Bank of North Carolina,
incorporated by reference as Exhibits 4(d)(1) through 4(d)(16)
hereto.
*10(c)(2) Future Advance Deed of Trust and Security Agreement
(Fayetteville, NC, property) dated October 29, 1990 between
Registrant and NCNB National Bank of North Carolina, filed as
Exhibit 2(b) to the Registrant's Form 8-K Current Form dated
November 12, 1990.
*10(c)(3) Future Advance Deed of Trust and Security Agreement (Rocky
Mount, NC property) dated October 29, 1990 between Registrant
and NCNB National Bank of North Carolina, filed as Exhibit
2(c) to Registrant's Form 8-K Current Form dated November 12,
1990.
*10(c)(4) Amended and Restated Security Agreement dated May 29, 1991
between Registrant and NCNB National Bank of North Carolina,
filed as Exhibit 10(c)(5) to Registrant's Form 10-K Annual
Report for the fiscal year ended October 29, 1993.
*10(d)(1) Stock and Option Purchase Agreement dated May 24, 1994 between
Registrant and Chadbourne Corporation, filed as Exhibit
10(d)(1) to Registrant's Form 10-Q Quarterly Report for the
fiscal quarter ended April 29, 1994.
11 Computation of Earnings Per Share
9
<PAGE>
21 Subsidiary of Registrant
23 Consent of Ernst & Young LLP, Independent Auditors
27 Financial Data Schedule
- ----------------------------------
*Incorporated by reference to previous filing.
10
<PAGE>
Exhibit 2(h)
Agreement
THIS AGREEMENT, dated as of the 8th day of September, 1995, between
TEXFI INDUSTRIES, INC., a Delaware corporation ("Texfi") and DECOTECH, L.C., a
South Carolina limited liability company ("Decotech").
W I T N E S S E T H:
WHEREAS, Texfi and Decotech are parties to an Asset Purchase Agreement,
dated as of March 31, 1995 (the "Purchase Agreement"), whereby Decotech
purchased from Texfi certain real and personal property of Texfi located in
Marion, North Carolina;
WHEREAS, as part of the consideration paid by Decotech to Texfi for the
aforesaid assets, Decotech delivered to Texfi that Subordinated Promissory Note
dated March 31, 1995, in the principal amount of $2,000,000 executed by Decotech
in favor of Texfi (the "Promissory Note");
WHEREAS, pursuant to the terms of the Promissory Note, a payment of
principal and interest in the amount of $682,777.78 was due and payable to Texfi
from Decotech on July 31, 1995, and interest on principal has continued to
accrue under the Promissory Note from August 1, 1995, at the rate of $555.56 per
day (the "Overdue Payment");
WHEREAS, as of the date hereof, Decotech has not paid the Overdue
Payment to Texfi;
WHEREAS, the parties agree that the amount of $330,388.23 is owed by
Texfi to Decotech pursuant to the provisions of the Purchase Agreement
($242,687.00 for the post-closing adjustment to the purchase price based upon
the inventory valuation and $87,701.23 for vacation pay and other
adjustments)(the "Purchase Agreement Payment");
WHEREAS, Decotech has made certain financial information available to
Texfi, including, without limitation, balance sheets and income statements of
Decotech for each of the four months ended July 1, 1995, and in reliance thereon
Texfi has agreed to enter into this Agreement and to transfer the Promissory
Note to Deco General Partnership, a South Carolina general partnership
consisting of certain of the members of Decotech ("Deco"), pursuant to the terms
and conditions of that Note Purchase Agreement of even date herewith among
Texfi, Decotech and Deco (the "Note Purchase Agreement");
WHEREAS, Decotech and Texfi desire for Texfi to offset the Purchase
Agreement Payment against the Overdue Payment;
WHEREAS, it is the desire of Texfi and Decotech fully and finally to
settle and resolve all disputes and differences which exist or may exist between
them, known or unknown,
<PAGE>
including, without limitation, claims arising out of the Purchase Agreement and
the transactions contemplated thereby and related thereto;
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained and the transfer of the Promissory Note to Deco pursuant to the
terms and conditions of that Note Purchase Agreement, the parties hereto hereby
agree as follows:
1. Texfi hereby offsets the Purchase Agreement Payment against the
Overdue Amount as full and final payment of the Purchase Agreement Payment and
acknowledges the amount of the setoff as partial payment of the Overdue Amount.
Decotech hereby acknowledges and consents to the setoff of the Purchase
Agreement Payment against the Overdue Amount. Decotech agrees that (i) the
portion of the Overdue Payment equal to the difference between the Overdue
Payment and the Purchase Agreement Amount (the "Outstanding Overdue Payment")
remains outstanding under the Promissory Note and (ii) except for a reduction of
the Overdue Payment by an amount equal to the Purchase Agreement Payment,
nothing in this Agreement constitutes or shall be deemed to constitute a waiver
of any of Texfi's rights under the Promissory Note and the Promissory Note
remains in full force and effect unchanged.
2. Except for the Continuing Texfi Claims (as hereafter defined), Texfi
hereby fully releases and forever discharges Decotech from any and all rights,
claims, demands, damages, actions, causes of action, costs, expenses, and suits
at law or in equity, known or unknown, fixed or contingent, that Texfi has or
may have against Decotech, at this time, at any time heretofore or at any time
hereafter, based upon, relating to or arising from any event, act or omission
whatsoever which occurred prior to the date hereof, including, without
limitation, claims based upon or arising out of the Purchase Agreement or the
consummation of the transactions contemplated thereby. Except with respect to
the Continuing Texfi Claims, Texfi covenants and agrees that it has not nor will
it hereafter commence, maintain, or assert any right or claim of any nature, or
prosecute any action or proceeding at law or otherwise, against Decotech for
damages or loss of any kind or amount or for any other legal or equitable relief
based upon, relating to or arising from any event, act or omission that occurred
prior to the date hereof based upon or arising out of the Purchase Agreement or
the consummation of the transactions contemplated thereby. As used in this
Agreement, the term "Continuing Texfi Claims" shall be defined as all rights,
claims, demands, damages, actions, causes of action, costs, expenses, and suits
at law or in equity, known or unknown, fixed or contingent, that Texfi has or
may have against Decotech, at this time, at any time heretofore or at any time
hereafter, based upon, relating to or arising from the Promissory Note (except
for the reduction of the Overdue Payment as provided in Section 1 hereof), that
Assignment of Lease among Texfi, Decotech and Etowah Warehouse, Inc. dated March
31, 1995, that Assignment of Sublease among Texfi, Decotech and Dan River, Inc.
dated March 31, 1995, those Equipment Subleases between Texfi and Decotech dated
March 31, 1995 with respect to certain equipment leased by Texfi from Pitney
Bowes Credit Corporation, John Hancock Leasing Corporation and First American
National Bank, respectively, and Section 8.5 of the Purchase Agreement [Bill and
Hold Inventory].
- 2 -
<PAGE>
3. Decotech hereby fully releases and forever discharges Texfi from any
and all rights, claims, demands, damages, actions, causes of action, costs,
expenses, and suits at law or in equity, known or unknown, fixed or contingent,
that Decotech has or may have against Texfi, at this time, at any time
heretofore or at any time hereafter, based upon, relating to or arising from any
event, act or omission whatsoever that occurred prior to the date hereof,
including, without limitation, claims based upon or arising out of the Purchase
Agreement or the consummation of the transactions contemplated thereby. Decotech
covenants and agrees that it has not nor will it hereafter commence, maintain,
or assert any right or claim of any nature, or prosecute any action or
proceeding at law or otherwise, against Texfi for damages or loss of any kind or
amount or for any other legal or equitable relief based upon, relating to or
arising from any event, act or omission which occurred prior to the date hereof
based upon or arising out of the Purchase Agreement or the consummation of the
transactions contemplated thereby.
4. Except with respect to the Continuing Texfi Claims, it is the
intention of the parties that this Agreement and the releases contained herein
shall constitute a full and final accord and satisfaction of all claims that the
parties may have or hereafter be deemed to have against the other arising from
events, acts or omissions that occurred prior to the date hereof. In furtherance
of this intention, each party expressly waives any statutory or common law
provision that would otherwise prevent this release from extending to claims
other than the Texfi Continuing Claims that are not currently known or suspected
to exist in any party's favor at the time of executing the release and which if
known by that party, might have materially affected his or its settlement as
provided for hereunder.
5. Decotech hereby warrants and represents to Texfi that (i) it is duly
organized and has full power and authority to enter into this Agreement and the
Note Purchase Agreement, (ii) all action required to be taken to authorize the
execution, delivery and performance by Decotech has been taken, (iii) Management
Advisory Services, Inc. is the duly appointed Manager of Decotech with full
authority to execute this Agreement and the Note Purchase Agreement on its
behalf, (iv) entering into this Agreement and the performance thereof by
Decotech will not violate Decotech's organization documents, any agreement,
judgment or other instrument to which it is a party or by which it is bound, and
(v) BNY Financial Corporation, Decotech's principal lender, has consented to the
transactions contemplated by this Agreement.
6. This Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and assigns of the parties hereto.
7. This Agreement and the other writings referred to herein or
delivered pursuant hereto shall constitute the entire understanding of the
parties with respect to the subject matter hereof. There are no representations,
promises, guaranties, covenants or undertakings other than as expressly set
forth herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement
- 3 -
<PAGE>
may be amended only by a written instrument duly executed by the parties, and
any condition to a party's obligations hereunder may only be waived in writing
by such a party.
8. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of North Carolina.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
TEXFI INDUSTRIES, INC.
By: /s/ William L. Remley
Title: Chief Executive Officer
DECOTECH, L.C.
By: Management Advisory Services,
Inc., Manager
By: /s/ L. Terrell Sovey, Jr.
Title: President
- 4 -
<PAGE>
Exhibit 2(i)
Note Purchase Agreement
THIS NOTE PURCHASE AGREEMENT (the "Agreement"), dated as of the 8th day
of September, 1995, among TEXFI INDUSTRIES, INC. , a Delaware corporation
("Texfi"), DECOTECH, L.C., a South Carolina limited liability company
("Decotech") and DECO GENERAL PARTNERSHIP, a South Carolina general partnership
("Deco").
W I T N E S S E T H:
WHEREAS, Texfi and Decotech are parties to an Asset Purchase Agreement,
dated as of March 31, 1995 (the "Purchase Agreement"), whereby Decotech
purchased from Texfi certain real and personal property of Texfi located in
Marion, North Carolina;
WHEREAS, as part of the consideration paid by Decotech to Texfi for the
aforesaid assets, Decotech delivered to Texfi that Subordinated Promissory Note
dated March 31, 1995, in the principal amount of $2,000,000 executed by Decotech
in favor of Texfi (the "Promissory Note");
WHEREAS, Texfi, BNY Financial Corporation ("BNY") and Decotech are
parties to that Subordination Agreement, dated as of March 31, 1995 (the
"Subordination Agreement"), whereby the obligations of Decotech to Texfi under
the Promissory Note are subordinated in certain respects to the payment of
certain obligations of Decotech to BNY;
WHEREAS, pursuant to the terms of the Promissory Note, a payment of
principal and interest in the amount of $682,777.78 was due and payable to Texfi
from Decotech on July 31, 1995, and interest on principal has continued to
accrue under the Promissory Note from August 1, 1995, at the rate of $555.56 per
day (the "Overdue Payment");
WHEREAS, Texfi and Decotech agree that the amount of $330,388.23 was
owed by Texfi to Decotech pursuant to the terms of the Purchase Agreement (the
"Purchase Agreement Payment");
WHEREAS, Texfi and Decotech are parties to an Agreement of even date
herewith (the "Setoff Agreement"), whereby the Purchase Agreement Payment was
offset against the Overdue Payment;
WHEREAS, pursuant to the Setoff Agreement, the difference between the
Overdue Payment and the Purchase Agreement Payment (the "Remaining Overdue
Payment") and all other amounts owed by Decotech to Texfi under the Promissory
remain outstanding;
WHEREAS, Decotech has made certain financial information available to
Texfi, including, without limitation, balance sheets and income statements of
Decotech for each of the four months ended July 1, 1995, and in reliance thereon
Texfi has agreed to transfer the Promissory Note to Deco pursuant to the terms
and conditions of this Agreement;
<PAGE>
WHEREAS, Deco desires to purchase the Promissory Note from Texfi, and
Texfi desires to sell the Promissory Note to Deco, on the terms and conditions
set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, the parties hereto hereby agree as follows:
1. In exchange for the sum of Four Hundred Thousand Dollars
($400,000.00) in cash paid to Texfi by Deco upon the execution of this Agreement
by the parties hereto:
(i) Deco hereby purchases from Texfi and Texfi hereby sells,
conveys, assigns, transfers and delivers to Deco, its successors and
assigns forever, all of Texfi's right, title and interest in, to and
under the Promissory Note without recourse against Texfi; and
(ii) Deco hereby assumes and agrees to perform, fulfill and
discharge all of Texfi's liabilities and obligations under the
Subordination Agreement and Texfi hereby assigns all of its rights
thereunder to Deco.
2. Deco hereby acknowledges that: (i) the amount outstanding under the
Promissory Note has been reduced by an amount equal to the Purchase Agreement
Payment pursuant to the terms and conditions of the Setoff Agreement and it is
purchasing the Promissory Note subject to such reduction in outstanding amount;
(ii) except as specifically provided in Section 4 hereof, Texfi has made no
representations, warranties or guaranties with respect to the Promissory Note or
the collectability thereof; and (iii) it has relied upon its own investigation
in determining to purchase the Promissory Note and it assumes the risk of
nonpayment with respect thereto.
3. Decotech hereby acknowledges and consents to the sale and assignment
of the Promissory Note to Deco by Texfi and to the assignment to and assumption
by Deco of all of Texfi's rights, liabilities and obligations under the
Subordination Agreement as provided in this Agreement.
4. Texfi hereby warrants and represents to Deco that, except as
provided in the Setoff Agreement, it has not sold or otherwise transferred any
interest in the Promissory Note to any entity.
5. Deco hereby warrants and represents to Texfi that: (i) it is a
general partnership duly organized and validly existing under the laws of the
State of South Carolina with full partnership power and authority to undertake
the obligations contemplated by this Agreement, to execute and to deliver this
Agreement and to perform its obligations hereunder; (ii) the execution and
delivery of this Agreement have been duly authorized by all necessary
partnership action; and (iii) this Agreement has been duly executed and
delivered by Deco and is a valid and binding obligation of Deco, enforceable
against it in accordance with its terms.
- 2 -
<PAGE>
6. Deco hereby agrees to defend, indemnify, protect and save Texfi
harmless from and against, and to reimburse Texfi for, any and all claims,
damages, losses, liability, expenses or costs, of every kind and nature
(including, but not limited to, attorneys' fees and court costs) arising, in
whole or in part, out of or in connection with the Promissory Note, the
Subordination Agreement or a breach of any of its representations, warranties or
agreements hereunder.
7. This Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and assigns of the parties hereto.
8. This Agreement and the other writings referred to herein or
delivered pursuant hereto shall constitute the entire understanding of the
parties with respect to the subject matter hereof. There are no representations,
promises, guaranties, covenants or undertakings other than as expressly set
forth herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. This
Agreement may be amended only by a written instrument duly executed by the
parties, and any condition to a party's obligations hereunder may only be waived
in writing by such a party.
9. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of North Carolina.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
TEXFI INDUSTRIES, INC.
By: /s/ William L. Remley
Title: Chief Executive Officer
DECOTECH, L.C.
By: Management Advisory Services,
Inc., Manager
By: /s/ L. Terrell Sovey, Jr.
Title: President
DECO GENERAL PARTNERSHIP
By: Management Advisory Services,
Inc., Partner
By: /s/ L. Terrell Sovey, Jr.
Title: President
- 3 -
<PAGE>
Exhibit 4(d)(16)
Fifteenth Amendment to Loan Agreement
THIS FIFTEENTH AMENDMENT TO LOAN AGREEMENT, dated as of
November 3, 1995, (the "Amendment") is made to the Loan Agreement dated as of
October 29, 1990, as amended by a First Amendment to Loan Agreement, dated March
14, 1991, as amended by a Second Amendment to Loan Agreement, dated March 28,
1991, as amended by a Third Amendment to Loan Agreement, dated May 29, 1991, as
amended by a Fourth Amendment to Loan Agreement, dated as of June 14, 1991, as
amended by a Fifth Amendment to Loan Agreement, dated as of January 28, 1992, as
amended by a Sixth Amendment to Loan Agreement, dated as of November 4, 1992, as
amended by a Seventh Amendment to Loan Agreement, dated as of December 22, 1992,
as amended by an Eighth Amendment to Loan Agreement, dated as of August 24,
1993, as amended by a Ninth Amendment to Loan Agreement, dated as of October 29,
1993, as amended by a Tenth Amendment to Loan Agreement, dated as of April 28,
1994, as amended by an Eleventh Amendment to Loan Agreement, dated as of October
28, 1994. as amended by a Twelfth Amendment to Loan Agreement, dated as of
January 27, 1995, as amended by a Thirteenth Amendment to Loan Agreement, dated
as of April 28, 1995, as amended by a Fourteenth Amendment to Loan Agreement
dated as of July 28, 1995 between TEXFI INDUSTRIES, INC., a Delaware corporation
(the "Borrower"), and NATIONSBANK, N.A, (formerly known as NationsBank,
N.A.(Carolinas) and as NationsBank of North Carolina, N.A.) a national
association, acting as agent for the Lenders (as described in the Loan
Agreement, as defined below) (the "Agent") and the Lenders.
RECITALS
A. The Borrower and the Agent entered into a Loan Agreement dated as of
October 29, 1990, pursuant to which the Lenders, as defined in the Loan
Agreement, extended a $25,000,000 Term Loan and a $15,000,000 Revolving Line of
Credit to the Borrower, which agreement was amended by the First Amendment to
Loan Agreement, dated March 14, 1991, as amended by a Second Amendment to Loan
Agreement, dated March 28, 1991, as amended by a Third Amendment to Loan
Agreement, dated May 29, 1991, as amended by a Fourth Amendment to Loan
Agreement, dated as of June 14, 1991, as amended by a Fifth Amendment to Loan
Agreement, dated as of January 28, 1992, as amended by a Sixth Amendment to Loan
Agreement, dated as of November 4, 1992, as amended by a Seventh Amendment to
Loan Agreement, dated as of December 22, 1992, as amended by an Eighth Amendment
to Loan Agreement, dated as of August 24, 1993, as amended by a Ninth Amendment
to Loan Agreement, dated as of October 29, 1993, as amended by a Tenth Amendment
to Loan Agreement, dated as of April 28, 1994, as amended by an Eleventh
Amendment to Loan Agreement, dated as of October 28, 1994. as amended by a
Twelfth Amendment to Loan Agreement, dated as of January 27, 1995, as amended by
a Thirteenth Amendment to Loan Agreement, dated as of April 28, 1995 by a
Fourteenth Amendment to Loan Agreement dated as of July 28, 1995 (as further
amended, modified, restated or
<PAGE>
supplemented from time to time, the "Loan Agreement"). All capitalized terms not
otherwise defined in this Amendment shall have the meaning assigned to them in
the Loan Agreement.
B. In connection with the Second Amendment, the Subsidiary Equipment
Security Agreements were executed and delivered. In connection with the Third
Amendment, the Assignments of Factor Receivables and the Subsidiary Security
Agreements were terminated and two of the Deeds of Trust and Assignments of
Leases, Rents and Profits were executed and delivered. Pursuant to the Seventh
Amendment, the schedule for repayment of the Term Loans were revised and the
schedule for repayment of the Revolving Credit Notes were revised to convert the
Revolving Line of Credit into a term loan payable in installments commencing on
July 31, 1993 and ending on October 31, 1997. Pursuant to the Tenth Amendment,
Twelfth Amendment and Thirteenth Amendment, the schedule for repayment of the
loans and certain financial covenants contained in Article IX of the Loan
Agreement were revised. The other amendments to the Loan Agreement revised
certain financial covenants contained in Article IX of the Loan Agreement.
C. The Borrower, the Lenders and the Agent desire to amend the Loan
Agreement further in accordance with the terms hereof, in order to revise a
certain financial covenant contained in the Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Lenders and the
Agent, for themselves, their successors and assigns, agree as follows:
ARTICLE 1.
AMENDMENTS
Section IX of the Loan Agreement is amended by deleting subparagraphs
9.9, 9.11 and 9.13 in their entirety and substituting the following new
subparagraphs therefor:
"9.9 Net Worth. Permit Tangible Net Worth, as of the last day
of each fiscal quarter of the Borrower, to be less than the sum of (i)
$1,800,000 plus (ii) the sum of, for each fiscal quarter of Borrower,
commencing with the first quarter of the Borrower's 1996 fiscal year:
(A) 50% of all Net Income for each fiscal quarter in which Net Income
is positive and (B) zero, for each fiscal quarter in which Net Income
is zero or negative, calculated for the entire period from and after
the end of the fourth quarter of the Borrower's 1995 fiscal year to the
date of determination thereof."
"9.11 Coverage Ratio. Permit (a) the Quarterly Coverage Ratio
to be less than (i) .75 to 1 at the end of the fourth quarter of the
Borrower's 1995 fiscal year, (ii) 0.7 to 1 at the end of the first
quarter of the Borrower's 1996 fiscal year and (iii) 1.0 to 1 at the
end of the second quarter of the Borrower's 1996 fiscal year and (b)
the Four Quarter Coverage Ratio to be less than (i) 0.9
- 2 -
<PAGE>
to 1 at the end of the fourth quarter of the Borrower's 1996 fiscal
year and (ii) 1.0 to 1 at the end of any fiscal quarter of the Borrower
thereafter.
"9.13 Working Capital. Permit Working Capital to be less than
the following amounts for the date or period indicated (such compliance
to be calculated as of the end of each fiscal quarter of the Borrower):
Applicable date of Period Working Capital
At the end of the fourth quarter of Borrower's $12,000,000
1995 fiscal year
At the end of the first quarter of Borrower's $ 8,000,000
1996 fiscal year
At the end of the second quarter of Borrower's $ 8,000,000
1996 fiscal year
At the end of the third quarter of Borrower's $ 9,000,000
1996 fiscal year and at the end of each fiscal
quarter thereafter
At the end of the fourth quarter of Borrower's $12,000,000
1996 fiscal year and at the end of each fiscal
quarter thereafter
ARTICLE 2.
GENERAL
2.1 Full Force and Effect. Except as expressly amended hereby, the Loan
Agreement shall continue in full force and effect in accordance with the
provisions thereof on the date hereof. As used in the Loan Agreement,
"hereinafter," "hereto," "hereof" and words of similar import shall, unless the
context otherwise requires, mean the Loan Agreement as amended by this
Amendment.
2.2 Applicable Law. This Amendment shall be governed by and c
onstrued in accordance with the laws and judicial decisions of the State of
North Carolina.
2.3 Counterparts, Terms. This Amendment may be executed in
two or more counterparts, each of which shall constitute an original, but
all of which when taken together shall constitute but one instrument.
2.4 Fees and Expenses. The Borrower agrees to pay all reasonable
out-of-pocket expenses incurred by the Agent in connection with the preparation,
execution and delivery of this Amendment, including, without limitation, all
fees and disbursements of Agent's counsel.
- 3 -
<PAGE>
2.5 Headings. The headings of this Amendment are for the purposes of
reference only and shall not effect the construction of the Amendment.
2.6 Valid Agreement. The parties acknowledge that this Amendment
complies in all respects with Section 15.7 of the Loan Agreement, which sets
forth the requirements for amendments thereto.
IN WITNESS WHEREOF, the Borrower and the Agent have caused this
Amendment to be executed by their duly authorized officers all as of the day and
year first above written.
TEXFI INDUSTRIES, INC.
[CORPORATE SEAL] By: /s/ Dane L. Vincent
Dane L. Vincent
ATTEST: Vice President Finance and Treasurer
/s/ Paige Clark Dickerson
Assistant Secretary
NATIONSBANK, N.A.,
as Agent
By: /s/ Joseph R. Netzel
Title: Vice President
- 4 -
<PAGE>
Exhibit 10(a)(6)
Resolution Amending 1987 Nonqualified Stock Option Plan
RESOLVED, that Section 4 of the Stock Option Plan be and hereby is
amended to read in its entirety as follows:
"4. Administration of the Plan. The Plan shall be administered
by a committee of the Board of Directors, consisting of two or more
persons appointed from time to time by the Board from among its
members. All members of the committee shall be both "disinterested
persons" within the meaning of Rule 16b-3 of the Rules under the
Securities Exchange Act of 1934, as amended, and "outside directors"
within the meaning of Section 162(m) of the Internal Revenue Code of
1986, as amended (the "Committee"). The Committee shall from time to
time grant the options to the extent and on the terms and conditions it
deems advisable to such eligible persons (as defined in Section 5
below) and for such number of shares as the Committee shall determine
consistent with the provisions of the Plan. Options granted under the
Plan shall be evidenced by agreements in such form as the Committee may
from time to time approve. The Committee shall have power to interpret
the Plan and any agreement evidencing options granted hereunder, to
make regulations for carrying out its purpose and to make other
determinations in connection with its administration, all of which
shall be final and conclusive."
<PAGE>
Exhibit 10(a)(7)
Form of 1987 Nonqualified Stock Option Agreements
THIS AGREEMENT, dated as of the 18th day of May, 1995, between Texfi
Industries, Inc., a Delaware corporation (hereinafter called the "Company"), and
__________________ (hereinafter called the "Option Holder").
WITNESSETH:
WHEREAS, the Company has adopted the Texfi Industries, Inc. 1987
Nonqualified Stock Option Plan, a copy of which is annexed hereto as Exhibit A
(hereinafter called the "1987 Nonqualified Plan"); and
WHEREAS, the Company recognizes the value to it of the services of the
Option Holder as a key employee of the Company, and is desirous of furnishing
him with added incentive and inducement to contribute to the success of the
Company; and
WHEREAS, on May 18, 1995, pursuant to the provisions of the Plan, the
Board of Directors of the Company (a) granted to the Option Holder an option in
respect of the number of shares hereinbelow set forth (b) fixed and determined
the exercise prices for the option hereinbelow set forth, and (c) approved the
form of this Agreement;
NOW, THEREFORE, it is agreed by and between the parties hereto as
follows:
1. The Company hereby grants to the Option Holder the right and option
to purchase, on the terms and subject to the conditions set forth in the 1987
Nonqualified Plan and this Agreement, all or any part of an aggregate of
_____________ shares of the Common Stock ($1.00 par value) of the Company at the
purchase prices and exercisable in the amounts and at the times as set forth in
this paragraph 1. The Option Holder must remain in the continuous employ of the
Company for one year from the date of grant of the Option before he can exercise
any part of the Option. Thereafter, the Option may be exercised as follows:
(a) At any time after May 18, 1996 and prior to the termination of
the Option, the Option Holder is entitled to purchase from the
Company up to an aggregate of:
________ shares of the Common Stock at a purchase price of
$2.81 per share; and
________ shares of the Common Stock at a purchase price of
$3.63 per share; and
________ shares of the Common Stock at a purchase price of
$4.43 per share.
(b) At any time after May 18, 1997 and prior to the termination of
the Option, the Option Holder is entitled to purchase from the
Company additional shares up to an aggregate of:
________ shares of the Common Stock at a purchase price of
$2.81 per share; and
________ shares of the Common Stock at a purchase price of
$3.63 per share; and
________ shares of the Common Stock at a purchase price of
$4.43 per share.
1
<PAGE>
Unless sooner terminated pursuant to the 1987 Nonqualified Plan or this
Agreement, the Option shall terminate, and all rights of the Option Holder shall
expire, on May 17, 2000. In no event may the Option be exercised after May 17,
2000.
2. The Option or any part thereof may, to the extent that it is
exercisable, be exercised by giving written notice of exercise to the Treasurer
of the Company, specifying the option price and number of shares to be purchased
and accompanied by payment of the aggregate option price of the number of shares
purchased. Subject to Sections 8 and 9 hereof, such exercise shall be effective
upon the actual receipt by the Treasurer of the Company of such written notice
and payment. The aggregate option price of all shares purchased shall be paid in
cash, in Common Stock of the Company, or by certified or official check payable
to the order of the Company and, prior to delivery of the shares covered by such
exercise of the Option, the Option Holder shall comply with Section 9 below
relating to withholding for taxes. If payment is made in Common Stock of the
Company, such Common Stock shall be valued on the basis of its fair market value
on the date of exercise. If the shares are then traded on the New York Stock
Exchange, fair market value on the date of exercise shall mean the average
between the highest and lowest trading prices on the last trading day preceding
the date of exercise. Otherwise, fair market value shall be determined by the
Board of Directors of the Company and such determination shall be binding on all
persons. No rights or privileges of a stockholder of the Company in respect of
any of the shares issuable upon the exercise of any part of the Option shall
inure to the Option Holder, or to any other person entitled to exercise the
Option as herein provided, unless and until certificates representing such
shares shall have been issued and delivered.
3. The Option or any part thereof may be exercised during the lifetime
of the Option Holder only by the Option Holder and, except as provided in
Sections 9, 10 and 11 of the 1987 Nonqualified Plan, may be exercised only while
the Option Holder is in the employ of the Company.
4. Upon termination of the Option Holder's employment with the Company
for any reason other than his death, the Option will terminate to the extent
that it has not previously been exercised, except that:
(a) If the Option Holder's employment terminates more than two
years after the date of grant of the Option, other than due to a
termination for Cause (as defined in Section 9 of the 1987 Nonqualified
Plan), the Option Holder may exercise the Option within 30 days after
such termination, but only to the extent that he could have exercised
the Option immediately prior to the termination and in no event after
the Option has expired; and
(b) If the Option Holder retires from service with the consent
of the Company at a time when he is entitled to exercise the Option, he
may exercise the Option within 90 days after such retirement, but only
to the extent that he could have exercised the Option immediately prior
to his retirement and in no event after the Option has expired.
2
<PAGE>
5. Upon termination of the Option Holder's employment by reason of his
death, the Option may be exercised within 180 days after his death by the estate
or other legal representative of the deceased Option Holder, but only to the
extent that it could have been exercised by the Option Holder immediately prior
to his death and in no event after the Option has expired.
6. Except as provided in Section 5 above, the Option and the rights and
privileges confirmed by this Agreement shall not be transferred, assigned,
pledged or hypothecated in any way, whether by operation of law or otherwise.
Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose
of the Option or any right or privilege confirmed hereby contrary to the
provisions hereof, the Option and the rights and privileges confirmed hereby
shall immediately become null and void.
7. In the event of a stock dividend, split-up or combination of shares,
recapitalization or merger in which the Company is the surviving corporation
(other than a merger in which the stock- holders of the Company exchange their
stock) or other similar capital change, the number of shares of Common Stock of
the Company then subject to the Option and the exercise prices shall be adjusted
in such manner, if any, as the Board of Directors in its discretion shall
determine in order to provide the Option Holder with the substantial equivalent
of the opportunity provided here-under immediately prior to such change. Such
determination by the Board of Directors shall be binding on all persons. In the
event of a consolidation or a merger in which the Company is not the surviving
corporation, or any other merger in which the stock holders of the Company
exchange their stock, or in the event of complete liquidation of the Company, or
in the case of a tender offer accepted by the Board of Directors, the Option
shall thereupon terminate, provided, however, that the Board in its discretion
may, prior to the effective date of any such consolidation, merger, liquidation
or tender offer, either (i) make the Option immediately exercisable (to the
extent it is not already so exercisable) or (ii) arrange to have granted to the
Option Holder a replacement option on such terms as the Board determines to be
fair and reasonable.
8. The Option shall not be exercised in whole or in part and no
certificates representing shares subject to the Option shall be delivered,
(a) if any requisite approval or consent of any governmental
authority having jurisdiction over the exercise of options shall not
have been secured or if the issuance of shares subject to the Option
would violate any Federal, state or local law, regulation or order that
may be applicable; or
(b) so long as the Common Stock of the Company is listed on
the New York Stock Exchange, if the shares subject to the option shall
not have been effectively listed on such Exchange, unless the Company
is advised by its counsel that such listing is no longer required or
applicable.
The Company shall use its best efforts to obtain any such approval or consent
and to effect compliance with any such applicable law, regulation, order or
listing requirement, and the Option
3
<PAGE>
Holder or any other person entitled to exercise the Option shall take any action
reasonably requested by the Company in such connection.
9. The Option Holder acknowledges that, upon any exercise of the
Option, he will recognize ordinary income for income tax purposes (generally in
an amount equal to the difference between the fair market value of the shares on
the date of exercise and the option price paid therefor) and the Company will be
entitled to a corresponding deduction. Consequently, the Option Holder agrees
that he will pay, or make arrangements to pay, to the Company an amount equal to
any income and other taxes that the Company is required to withhold as a result
of his exercise of the Option. If for any reason such payment or arrangement to
pay is not made, the Company shall be entitled to withhold, from other sums
payable to the Option Holder, the amount of such income and other taxes.
10. Any notice to be given to the Company shall be addressed to the
Treasurer of the Company at 5400 Glenwood Avenue, Suite 215, Raleigh, North
Carolina 27612.
11. Nothing herein contained shall affect the right of the Option
Holder to participate in and receive benefits under and in accordance with the
provisions of any pension, insurance or other benefit plan or program of the
Company in effect from time to time and for which he is eligible.
12. Nothing herein contained shall affect the right of the Company,
subject to the terms of any existing contractual arrangement to the contrary, to
terminate the Option Holder's employment at any time for any reason whatsoever.
13. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their successors or assigns, but neither this Agreement
nor any rights hereunder shall be assignable or otherwise transferable by
either party except as herein above expressly set forth.
TEXFI INDUSTRIES, INC.
By:
Option Holder
4
<PAGE>
Exhibit 10(a)(10)
Resolution Amending Directors' Deferred Stock Compensation Plan
RESOLVED, that paragraph 14 of the Deferred Stock Compensation Plan be
and hereby is amended by revising the third sentence thereof to read as follows:
"This Plan may at any time be terminated by the Committee and
may be modified or amended from time to time by the Committee, provided,
however, that the Committee may not modify or amend this Plan more than
once every six months (other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income Security Act, or
the rules thereunder) and, provided further, that without stockholder
approval the Committee may not modify or amend the Plan so as to: (a)
increase the maximum aggregate number of shares available under this
Plan, except as permitted under paragraph 8 above; (b) increase the
payments receivable in respect of Deferred Stock Units credited under
the Plan except as permitted under paragraph 8 above; or (c) change the
designation of the persons eligible to receive shares under the Plan."
<PAGE>
Exhibit 10(a)(13)
Resolution Amending 1990 Executive Stock Purchase Plan
RESOLVED, that Section 3 of the Stock Purchase Plan be and hereby is
amended to read in its entirety as follows:
"3. Eligibility. All officers, key executive employees, and
managerial and supervisory salaried employees of the Company and its
subsidiaries who participate in an incentive compensation plan
maintained by the Company or a Subsidiary, as the case may be, which
provides for cash payments ("Bonuses") to such employees if specified
performance goals are achieved and which is designated by the Board of
Directors as an eligible plan hereunder ("Eligible Plan") shall be
eligible to participate in this Plan ("Eligible Employees")."
FURTHER RESOLVED, that the 1994 Management Incentive Compensation Plan
(which is being terminated effective November 4, 1995) and the Performance
Incentive Plan (which is being adopted on even date herewith) be and hereby are
designated as Eligible Plans under Section 3 of the Stock Purchase Plan, as
amended.
<PAGE>
Exhibit 10(a)(16)
Letter Agreement dated March 20, 1995
[Letterhead of Texfi Industries, Inc.]
Mr. L. Terrell Sovey, Jr.
367 South Pine Street
Spartanburg, South Carolina 29302
You have requested that consideration be given to several matters relating to
your change of status. This letter will address those matters.
1. With reference to Section 6.2 of your Employment Agreement with Texfi
dated November 1, 1991, you have requested that the insurance policy
which was purchased by Texfi to fund in part the payments provided for
in that Section be assigned to you and that Texfi make monthly
payments, beginning at an early date, at the rate of $100,000 per year,
until such time as the total amount of these payments is equal to the
difference between the present value of the payments provided for in
Section 6.2 ($100,000 per year for ten years calculated as provided in
Section 6.2) and the cash value of the insurance policy being assigned
to you. You have also requested that an interest factor be included in
the monthly payments.
Our understanding of this arrangement is as follows:
(a) The present value the payment provided for in Section 6.2,
computed as provided in that Section as of March 13, 1995, is
$750,612.
(b) Texfi would assign to you Policy Number 2,364,024 issued by
Phoenix Mutual Life Insurance Company, which has a cash value
as of March 13, 1995 of $389,546. As you know, this policy is
now held by First Union National Bank as Trustee under a Trust
Agreement among you, Texfi and First Union dated November 1,
1987. It will be necessary for appropriate documentation to be
entered into among the parties to this Trust Agreement to
terminate the Agreement and release the policy to be assigned
to you.
(c) Texfi would pay to you each month beginning April 1,1995, the
sum of $8,333.33, which payments would continue until March 1,
1999, with a final payment of $7,954.95 on April 1, 1999, at
which time Texfi would have paid to you in the aggregate
$407,954.79. These payments represent the difference between
the present value of the payments provided in Section 6.2 and
the cash value of the insurance policy being assigned to you
(such difference being $361,066), plus an interest factor of
$46,888.79.
<PAGE>
Mr. L. Terrell Sovey, Jr.
March 20, 1995
Page 2
(d) It appears that both the assignment of the insurance policy as
provided in (b) above and payment of the amounts provided for
in (c) above will be subject to withholding taxes.
2. The furniture and equipment now located in your office in Spartanburg,
listed on the attached schedule, will be sold to you for $2,500.
3. Texfi has delivered to you certificates evidencing 11,762 share of
common stock that are restricted pursuant to the terms of the 1990
Restricted Incentive Stock Plan of the Company. In order to remove
these restrictions, it is necessary that the Board of Directors approve
your early retirement in order that your retirement would be deemed as
"Approved Retirement" as defined in Section 1.01 of that plan. The
Board of Directors has taken the necessary action in this regard,
subject to a mutual agreement having been reached with regard to the
other matters outlined in this letter.
4. It will be satisfactory for your 1994 income tax return to be prepared
by Ernest & Young at the Company's expense. Ernest & Young has advised
us that the cost of preparation of these returns will not exceed
$1,900.
If the foregoing is in accordance with your understanding, please sign and
return to me the enclosed copy of this letter. We will then proceed with actions
necessary to implement our agreement as set forth in this letter.
Sincerely,
/s/ William L. Remley
William L. Remley
Vice Chairman and Chief Executive Officer
Read and agreed to:
/s/ L. Terrell Sovey, Jr.
L. Terrell Sovey, Jr.
Dated: 3/27/95
<PAGE>
Mr. L. Terrell Sovey, Jr.
March 20, 1995
Page 3
ASSETS TO BE TRANSFERRED TO TERRELL SOVEY BY TEXFI INDUSTRIES
<TABLE>
<CAPTION>
<S> <C> <C>
FAS # Description Acquisition Date
- ----- ----------- ----------------
05640 Ricoh 120EN Fax Machine March 1, 1989
06917 Chair January 1, 1992
06918 Chair January 1, 1992
06919 Chair January 1, 1992
06920 Chair January 1, 1992
06921 Chair January 1, 1992
06922 Chair January 1, 1992
06923 Chair January 1, 1992
06924 Chair January 1, 1992
06925 Chair January 1, 1992
06926 Chair January 1, 1992
06927 Chair January 1, 1992
06928 48" by 96" Walnut Table January 1, 1992
06929 12' by 48" Blackboard January 1, 1992
06930 Conference Room Renovation January 1, 1992
06931 Speaker Telephone January 1, 1992
07112 Okidata L400 Laser Printer February 1, 1993
07113 486/50 50 MHZ PC with modem February 1, 1993
</TABLE>
<PAGE>
Exhibit 10(a)(23)
Texfi Industries, Inc. Performance Incentive Plan
1. PLAN PURPOSE
The Company wishes to adopt a Performance Incentive Plan to provide
incentive to Plan Participants to enhance corporate success above those levels
normally expected, to reward Participants upon the achievement of that success
and to provide a substantial return on investment to stockholders of Texfi
Industries, Inc.
2. DEFINITIONS
For purposes of this Plan, the following are defined:
(a) "Award" or "Awards" shall mean a payment made to a Participant
under the terms of the Plan.
(b) "Base Salary" shall mean the regular rate of pay (prorated as
appropriate under the Plan) as established by the Company that is effective as
of January 1 of each year, unless a different effective date is determined by
the Compensation Committee for a particular Participant.
(c) "Company" shall mean Texfi Industries, Inc.
(d) "Board of Directors" shall mean the Board of Directors of Texfi
Industries, Inc.
(e) "Compensation Committee" shall mean the designated Compensation
Committee of the Board of Directors of Texfi Industries, Inc.
(f) "Participant" shall mean a full-time employee determined as
provided in Section 4(a), Eligibility for Awards.
(g) "Plan" shall mean the Performance Incentive Plan.
3. EFFECTIVE DATE AND AWARD PERIOD
(a) The Plan shall be effective as of November 1, 1994 and thereafter
at the beginning of each of the Company's fiscal years.
(b) The Award Period is the 12 months coinciding with each of the
Company's fiscal years.
(c) The plan expires on the last date of the Award Period, but shall
renew automatically unless eliminated or superseded by a new Plan or terminated
by the Board of Directors.
<PAGE>
4. ELIGIBILITY FOR AWARDS
(a) The eligibility of a prospective Participant to participate in this
Plan will be determined periodically by the Board of Directors on recommendation
of the Compensation Committee.
(b) The Board of Directors reserves the right to revoke the eligibility
of any Participant at any time, for any reason it deems appropriate.
5. AWARD DETERMINATION
(a) The Formulas and measures for payments under the Plan will be
determined by the Board of Directors on recommendation of the Compensation
Committee at the beginning of each Plan year.
(b) The determination of the amounts and method of calculation of the
Awards for each year will be set forth in the Awards Determination Sheet which
will be considered as an addendum to the Plan document for each Participant and
shall be so attached.
(c) The Award to any Participant for any Award Period shall not exceed
75% of the Base Salary for that Participant.
6. NEW HIRES, TRANSFERS AND TERMINATIONS
(a) If, during an Award Period, an employee becomes potentially
eligible to participate in this Plan, the Compensation Committee will, in its
sole discretion, determine the level of eligibility (if any) and the nature and
amounts of any Awards that may become eligible.
(b) If a Participant is transferred from a position that is eligible
for participation in the Plan to a position that is not eligible for
participation in the Plan, the Compensation Committee will, in its sole
discretion, determine the level of eligibility (if any) and the nature and
amounts of any Awards that may remain eligible.
(c) If a Participant's employment terminates prior to the end of an
Award Period on account of death, disability, or due to early or normal
retirement approved by the Board of Directors, the Participant's (of if
applicable, his or her estate) Award (if any) shall be calculated on a pro rata
basis. Such awards shall be paid at the same time and in the same manner as
described elsewhere in this Plan.
(d) Except as otherwise provided in paragraph (c) above, no Award shall
be allocated to any Participant whose employment is terminated during the Award
Period.
(e) Any Participant whose employment is terminated for cause after the
end of the Award Period but prior to the payment of an Award shall forfeit his
or her right to any unpaid Award.
- 2 -
<PAGE>
(f) Any Participant whose employment is terminated for reasons other
than cause after the end of the Award Period but prior to payment, will have his
or her award (if any) paid at the same time and in the same manner as described
elsewhere in this Plan.
7. RIGHTS TO AMEND OR TERMINATE PLAN AND AWARDS
The Company reserves the right, at the sole discretion of the Board of
Directors, to alter or eliminate this Plan or a Participant's Award at any time
without prior notice to Participants.
8. MISCELLANEOUS
(a) Headings. Headings to the sections of this Plan are provided solely
as a convenience and shall not control or affect the meaning or construction of
any of its provisions.
(b) Awards. Awards will be granted as soon as practical after the audit
by the independent auditing firm of the Company's financial statements for the
prior year. The intent is to grant awards within 90 days following the close of
the Company's books for the fiscal year under consideration. In order to be
eligible to receive an Award, a Participant must be employed as a full-time
eligible employee of the Company at the end of the Plan year under
consideration.
(c) Non-transferability of Awards. No Award under this Plan, and no
rights or interests therein, shall be assignable or transferable by a
Participant except by will or the laws of descent and distribution, and may not
be pledged, hypothecated or otherwise encumbered.
(d) Tax Withholding. The Company shall have the right to deduct from
any Awards, or require the Participant to remit to the Company any federal,
state or local taxes of any kind required by law to be withheld with respect to
such Award.
(e) No Right to Employment. Neither the action of the Company in
establishing this Plan nor any action taken by it under any provisions of this
Plan shall be construed as giving to any Participant the right to be retained in
the Company's employ or any right to Plan benefits or Payments whatsoever,
except to the extent of the benefits provided for by this Plan. The Company
expressly reserves the right at any time to dismiss any Participant without
incurring any liability for any claim against itself for any payment whatsoever,
except to the extent provided for in this Plan.
(f) Felony Conviction. Notwithstanding any other provision of this
Plan, if a Participant is convicted of a felony involving fraud,
misappropriation of funds or any other criminal activity of a similar nature
involving the Company and/or its assets, illegal use of trade secrets or
proprietary information gained while in the employ of the Company, such
Participant's rights to any benefits under this Plan shall be permanently and
immediately forfeited.
(g) Equitable Adjustments. Adjustments to the Plan caused by the
Company's directives, external events, acquisitions, or otherwise, may be made
from time to time and will be confirmed by an exchange of letters between the
Company and the participant.
- 3 -
<PAGE>
(h) Disputes. Any dispute regarding Awards under this Plan must be set
forth by the Participant in writing to the Company within sixty (60) days after
the Participant receives the final plan check for the fiscal year; otherwise,
the Awards and payment will be deemed correct and accepted by the Participant.
(i) Governing Law. The Plan and all actions taken thereunder shall be
governed by the laws of the State of North Carolina.
- 4 -
<PAGE>
Texfi Industries, Inc.
Awards Determination Sheet
Fiscal Year 199__ Formulas and Measures
For
----------------------------
I. ANNUAL INCENTIVE
The Participant will be paid an annual incentive as a percent of the
Participant's Base Salary for attainment of objectives as follows:
If:__________________________ The Bonus as a Percent of Base Salary is:
-----------------------------------
If:__________________________ The Bonus as a Percent of Base Salary is:
-----------------------------------
For actual attainments between the categories listed above, the bonus percentage
will be calculated on a pro-rata basis.
II. BONUS PAYMENTS
- 5 -
<PAGE>
Fiscal Year 1995 Formulas and Measures
I. ANNUAL INCENTIVE FOR CASH FLOW*
The Participant will be paid an annual incentive of up to 75% of the
Participant's Base Salary for attainment of targeted improvements in the
Company's operating Cash Flow.*
*Cash Flow shall mean the Earnings Before Interest, Taxes,
Depreciation, and Amortization (EBITDA) plus Net Changes in Working
Capital Accounts (Inventory, Accounts Receivable, and Accounts Payable)
for the Company.
II. BONUS PAYMENT
Bonus payments will be awarded in cash, and 50% of such payments will be
eligible for investment in the Company's Executive Stock Purchase Plan, which
enables the purchase of Texfi stock at 85% of the market value of such stock as
determined on the next preceding December 31. It is anticipated that the
Participant will make the eligible investment in the Executive Stock Purchase
Plan.
- 6 -
<PAGE>
Exhibit 10(b)(16)
Amendment to Term Loan Agreement
THIS AMENDMENT TO TERM LOAN AGREEMENT made as of the 31st day of
January, 1996, to that Term Loan Agreement (the "Agreement") dated October 30,
1992, by and between TEXFI INDUSTRIES, INC., a Delaware corporation (herein
called "Borrower"), and THE CIT GROUP/COMMERCIAL SERVICES, INC. (formerly known
as The CIT Group/BCC, Inc., formerly known as Barclays Commercial Corporation
and hereinafter called the "Lender") is effective as of November 3, 1995. The
Agreement is hereby amended as follows:
Paragraph 7.1 of the Agreement is hereby deleted in its entirety and
the following paragraph is substituted therefor:
"7.1 Net Worth. Permit Tangible Net Worth, as of the last day of each
fiscal quarter of the Borrower, to be less than the sum of (i) $1,800,000 plus
(ii) the sum of, for each fiscal quarter of Borrower, commencing with the first
quarter of the Borrower's 1996 fiscal year: (A) 50% of all Net Income for each
fiscal quarter in which Net Income is positive and (B) zero, for each fiscal
quarter in which net Income is zero or negative, calculated for the entire
period from and after the end of the fourth quarter of the Borrower's 1995
fiscal year to the date of determination thereof."
Paragraph 7.2 of the Agreement is hereby deleted in its entirety and
the following paragraph is substituted therefor:
"7.2 Working Capital. Permit Working Capital to be less than the
following amounts for the date or period indicated (such compliance to be
calculated as of the end of each fiscal quarter of the Borrower):
Applicable date of Period Working Capital
At the end of the fourth quarter of Borrower's $12,000,000
1995 fiscal year
At the end of the first quarter of Borrower's $ 8,000,000
1996 fiscal year
At the end of the second quarter of Borrower's $ 8,000,000
1996 fiscal year
At the end of the third quarter of Borrower's $ 9,000,000
1996 fiscal year and at the end of each fiscal
quarter thereafter
<PAGE>
At the end of the fourth quarter of Borrower's $12,000,000
1996 fiscal year and at the end of each fiscal
quarter thereafter
IN WITNESS WHEREOF, Borrower and the Lender have caused this Amendment
to Term Loan Agreement to be duly executed by their respective duly authorized
officers, all as of the day and year first above written.
ATTEST: TEXFI INDUSTRIES, INC.
Paige Clark Dickerson By:
Assistant Secretary Dane L. Vincent
Vice President Finance and
[CORPORATE SEAL] Treasurer
ATTEST: THE CIT GROUP/COMMERCIAL
SERVICES, INC.
Marilyn P. Kock By: Peter B. Cooney
Assistant Secretary Title: Vice President
[CORPORATE SEAL]
- 2 -
<PAGE>
Exhibit 11
Texfi Industries, Inc.
Computation of Earnings Per Share
<TABLE>
<CAPTION>
Fiscal Year
1995 1994 1993
NUMBER OF SHARES OF COMMON STOCK OUTSTANDING:
<S> <C> <C> <C>
Balance at beginning of period ......... 8,652,621 7,696,416 7,609,508
Stock options exercised ................ 3,069 1,381 89,186
Stock tendered as payment for option
shares ................................ -- (3,800)
Stock issued (canceled) under restricted
stock plan............................. (5,000) (6,385) 1,000
Stock issued on conversion of
debentures ............................ -- 522
Treasury stock sold..................... 924,000 --
Deferred compensation................... 37,209 --
---------- ---------- -----------
Balance at end of period ....... 8,650,690 8,652,621 7,696,416
========== ========== ==========
PRIMARY:
Net income (loss) (see Note 1) ......... $(16,914,000)$ (8,351,000) $ (8,483,000)
Less dividends on and accretion of issue
costs on redeemable cumulative preferred
stock ................................. -- -- (555,000)
----------- ------------ ------------
Net income (loss) applicable to common
stockholders .......................... $(16,914,000)$ (8,351,000) $ (9,038,000)
============ ============ ============
Weighted average number of shares outstanding:
Common stock outstanding for the period
based on a daily weighted average .... 8,651,668 8,107,507 7,675,806
Common stock equivalents - outstanding
stock options computed on the treasury
stock method using average market
price ................................ -- -- --
------------ ------------ -------
Weighted average number of common and
common equivalent shares outstanding ... 8,651,668 8,107,507 7,675,806
============ =========== ============
Per common share amounts:
Net income (loss) ..................... ($1.96) $(1.03) $(1.18)
============ ============ ==========
FULLY DILUTED:
Net income (loss) (see Note 1) ......... $16,914,000) $ (8,351,000) $ (8,483,000)
Add interest on convertible debentures,
net of income tax effect .............. 425,000 397,000 417,000
Less dividends on and accretion of issue
costs on redeemable cumulative preferred
stock ................................. -- (555,000)
----------- ------------ ------------
Net income (loss) applicable to common
stockholders .......................... $(16,489,000) $ (7,954,000) $ (8,621,000)
============= ============ ============
Weighted avg. number of shares outstanding:
Common stock outstanding for the period
based on a daily weighted average ..... 8,651,668 8,107,507 7,675,806
Common stock equivalents - outstanding
stock options computed on the treasury
stock method by using end-of-period
market prices in lieu of average market
prices ................................ -- -- --
Increase in common shares assuming
conversion of the 11-1/4% Convertible
Senior Subordinated Debentures ........ 528,647 528,647 528,825
----------- ----------- ------------
Weighted average number of common and
common equivalent shares outstanding ..... 9,180,315 8,636,154 8,204,631
=========== ============ ============
Per Common Share amounts:
Excluding Convertible Debenture Shares:
Net income (loss) ..................... $(1.96) $(1.03) $(1.18)
=========== ============ ==========
Including Convertible Debenture Shares:
Net income (loss) ..................... $(1.80) $(0.92) $(1.05)
=========== ============ ==========
NOTE 1: Refer to Notes 1J. and 7 to the Consolidated Financial Statements
appearing in Registrant's 1995 Annual Report to Stockholders included
as item 8 of this document.
<PAGE>
</TABLE>
<PAGE>
EXHIBIT 21
SUBSIDIARY OF TEXFI INDUSTRIES, INC.
Casualwear Express, Inc.
<PAGE>
Consent of Independent Auditors
We consent to the incorporation by reference in Registration Statements
No.2-79384 on Form S-8 dated September 15, 1982, No. 33-14697 on Form S-8
dated May 26, 1987, No. 33-22584 on Form S-8 dated June 16, 1988, No. 33-22592
on Form S-8 dated June 16, 1988, No. 33-25313 on Form S-8 dated October 31,
1988, No. 33-31969 on Form S-8 dated November 6, 1989, No. 33-34836 on Form
S-8 dated May 11, 1990, No. 33-34293 on Form S-8 dated April 11, 1990,
No. 33-38527 on Form S-8 dated December 31, 1990, No. 33-40298 on Form S-8
dated April 29, 1991, No. 33-47601 on Form S-8 dated April 30, 1992, and
No. 33-60565 on Form S-8 dated June 26, 1995 of our report dated December 7,
1995, with respect to the consolidated financial statements and schedule of
Texfi Industries, Inc. and subsidiary included in the Annual Report (Form 10-K)
for the year ended November 3, 1995.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
Raleigh, North Carolina
January 31, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-03-1995
<PERIOD-END> NOV-03-1995
<CASH> 747
<SECURITIES> 0
<RECEIVABLES> 10,535
<ALLOWANCES> (1,362)
<INVENTORY> 28,092
<CURRENT-ASSETS> 41,602
<PP&E> 110,307
<DEPRECIATION> (59,793)
<TOTAL-ASSETS> 96,045
<CURRENT-LIABILITIES> 37,408
<BONDS> 40,724
0
0
<COMMON> 33,720
<OTHER-SE> (29,483)
<TOTAL-LIABILITY-AND-EQUITY> 96,045
<SALES> 257,527
<TOTAL-REVENUES> 257,527
<CGS> 228,556
<TOTAL-COSTS> 244,803
<OTHER-EXPENSES> 12,094
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,116
<INCOME-PRETAX> 630
<INCOME-TAX> 0
<INCOME-CONTINUING> 630
<DISCONTINUED> (17,544)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,914)
<EPS-PRIMARY> (1.96)
<EPS-DILUTED> (1.96)
</TABLE>
