<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 3, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission File Number - 1-6797
TEXFI INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 56-0795032
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5400 Glenwood Avenue, Suite 215, Raleigh, North Carolina 27612
(Address of principal executive offices)
(ZIP Code)
(919) 783-4736
(Registrant's telephone number, including area code)
Number of shares of Common Stock outstanding
at June 17, 1996 - 8,735,491
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
<PAGE>
TEXFI INDUSTRIES, INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MAY 3, 1996
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
The consolidated financial statements included herein have been prepared by
Texfi Industries, Inc. (the "Company"), without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. The consolidated balance
sheet as of November 3, 1995 has been taken from the audited financial
statements as of that date. Certain information and note disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures are adequate to
make the information presented not misleading. It is suggested that these
consolidated financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's latest Annual
Report on Form 10-K.
The consolidated financial statements included herein reflect all
adjustments (none of which are other than normal recurring accruals) which are,
in the opinion of management, necessary for a fair presentation of the
information included. Operating results for the thirteen-week and twenty-six
week periods ended May 3, 1996 are not necessarily indicative of the results
that may be expected for the year ended November 1, 1996. The following
consolidated financial statements are included:
Consolidated Statements of Income for the thirteen weeks and twenty-six
weeks ended May 3, 1996 and April 28, 1995
Consolidated Balance Sheets as of May 3, 1996 and November 3, 1995
Consolidated Statements of Cash Flows for the thirteen weeks and
twenty-six weeks ended May 3, 1996 and April 28, 1995
Condensed Notes to Consolidated Financial Statements
1
<PAGE>
TEXFI INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share data)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
MAY 3, April 28, MAY 3, April 28,
1996 1995 1996 1995
---------- ---------- ---------- -------
<S> <C> <C> <C> <C>
NET SALES ........................... $ 58,780 $ 63,652 $ 116,843 $ 116,341
---------- ---------- ---------- ----------
COST AND EXPENSES:
Cost of goods sold ............... 52,335 56,047 103,210 102,251
Selling, general and admin. ...... 4,811 4,473 8,966 8,608
---------- ---------- ---------- ---------
Total ......................... 57,146 60,520 112,176 110,859
---------- ---------- ----------- ---------
OPERATING INCOME..................... 1,634 3,132 4,667 5,482
----------- ----------- ----------- ---------
OTHER EXPENSE (INCOME):
Interest ......................... 2,561 3,054 5,175 6,185
Other, net ....................... 55 6 50 (4)
---------- ---------- ----------- ----------
Total ......................... 2,616 3,060 5,225 6,181
---------- ---------- ----------- ---------
NET INCOME (LOSS) FROM CONTINUING
OPERATIONS .......................... (982) 72 (558) (699)
DISCONTINUED OPERATIONS:
Loss from operations of discontinued
operations........................ -- (975) -- (2,219)
Loss from disposal of discontinued
operations .................... -- (6,407) -- (13,326)
----------- ----------- ----------- ----------
Total.......................... -- (7,382) -- (15,545)
----------- ----------- ----------- ----------
Loss before Income Taxes............. (982) (7,310) (558) (16,244)
Provision for Income Taxes........... (8) -- -- --
NET LOSS............................. $ (974) $ (7,310) $ (558) $ (16,244)
=========== =========== ============ ==========
NET INCOME (LOSS) PER SHARE:
Net income (loss) from continuing
operations .................... $ (.11) $ .01 $(.07) $ (.08)
Loss from discontinued
operations .................... -- (.85) -- (1.80)
----------- ----------- ----------- ----------
Net loss.......................... $(.11) $(.84) $(.07) $(1.88)
=========== =========== =========== ==========
</TABLE>
See Notes to Consolidated Financial Statements on page 5.
2
<PAGE>
TEXFI INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(UNAUDITED)
MAY 3, November 3,
1996 1995
ASSETS
CURRENT ASSETS:
Cash and cash equivalents .............. $ 337 $ 747
Receivables:
Trade ............................... 2,617 1,958
Due from factor ..................... 42,580 6,971
Other ............................... 173 244
Inventories ............................ 29,724 28,092
Prepaid expenses ....................... 2,100 2,077
Property, plant and equipment held for
disposal - net....................... 586 1,513
--------- ---------
Total................................ 78,117 41,602
PROPERTY, PLANT AND EQUIPMENT - NET ...... 50,017 50,514
OTHER ASSETS ............................. 4,309 3,929
--------- ---------
$ 132,443 $ 96,045
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt ... $ 6,654 $ 8,452
Accounts payable ....................... 22,069 22,742
Other liabilities ...................... 5,005 6,144
Federal and state income taxes ......... 70 70
--------- --------
Total................................ 33,798 37,408
LONG-TERM DEBT ............................ 13,839 12,471
REVOLVING CREDIT LOAN...................... 39,871 --
SUBORDINATED DEBENTURES ................... 40,480 40,724
OTHER LONG-TERM OBLIGATIONS ............... 574 1,205
COMMON STOCKHOLDERS' EQUITY:
Common stock, $1.00 par value .......... 8,735 8,651
Additional paid-in capital ............. 25,186 25,069
Retained earnings ...................... (30,040) (29,483)
---------- ---------
Total............................... 3,881 4,237
---------- --------
$ 132,443 $ 96,045
========== ========
See Notes to Consolidated Financial Statements on page 5.
3
<PAGE>
TEXFI INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
MAY 3, April 28, MAY 3, April 28,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net (loss) income $ (974) $ (7,310) $ (558) $(16,244)
Adjustments to reconcile net (loss)
income to net cash (used in) provided
by operating activities:
Depreciation & amortization 2,056 2,338 4,153 5,130
Provision for losses on accounts
receivable 278 931 438 1,200
Loss on sale of property, plant
and equipment 2 3,657 5 7,558
Change in operating assets and liabilities:
Accounts receivable (39,035) (96) (36,635) 2,735
Inventories (3) 10,239 (1,632) 9,246
Prepaid and other assets 359 398 (141) (634)
Accounts payables and accrued
liabilities (2,408) (4,395) (2,443) (954)
-------- -------- -------- --------
NET CASH (USED IN) PROVIDED BY
OPERATING ACTIVITIES (39,725) 5,762 (36,813) 8,037
INVESTING ACTIVITIES
Purchases of property, plant and
equipment (2,130) (1,105) (4,262) (2,046)
Proceeds from sale of property, plant
and equipment 369 6,046 1,963 6,520
-------- -------- -------- --------
NET CASH (USED IN) PROVIDED BY
INVESTING ACTIVITIES (1,761) 4,941 (2,299) 4,474
FINANCING ACTIVITIES
Proceeds from long-term debt borrowing 19,000 -- 19,000 --
Proceeds (payments) from Revolver debt
borrowings 39,871 -- 39,871 --
Payments on long-term debt and capital
lease obligations (16,659) (6,626) (19,430) (9,324)
Payments for repurchase of subordinated
debentures (244) (4,393) (244) (4,393)
Capitalized loan costs (696) -- (696) --
Proceeds from employee stock plans 201 -- 201 --
Restricted Stock Forfeitures -- (18) -- (32)
-------- -------- -------- --------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 41,473 (11,037) 38,702 (13,749)
-------- -------- -------- --------
DECREASE IN CASH AND CASH
EQUIVALENTS (13) (334) (410) (1,238)
Cash and cash equivalents
at beginning of period 350 564 747 1,468
-------- -------- -------- --------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 337 $ 230 $ 337 $ 230
======== ======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements on page 5.
4
<PAGE>
TEXFI INDUSTRIES, INC.
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 3, 1996
1. Details of certain balance sheet captions are as follows (in thousands):
<TABLE>
<CAPTION>
(UNAUDITED)
MAY 3, November 3,
1996 1995
<S> <C> <C>
INVENTORIES:
Finished goods $ 12,313 $ 10,919
Goods in process 10,464 10,261
Raw materials 4,052 4,160
Supplies 2,895 2,752
-------- --------
Total $ 29,724 $ 28,092
======== ========
PROPERTY, PLANT AND EQUIPMENT:
Land and land improvements $ 2,841 $ 2,841
Buildings 23,094 23,099
Machinery, equipment, etc 81,699 83,531
Leasehold improvements 64 64
Construction in progress 2,897 772
-------- --------
Total 110,595 110,307
Less accumulated depreciation 60,578 59,793
-------- --------
Property, plant and equipment, net . $ 50,017 $ 50,514
======== ========
LONG-TERM DEBT:
Term loan at average 8.06% variable interest, payable in equal monthly
installments through balloon payment
due September 1998 $ 18,500 $ --
Term loan at 8.4202% -- 17,998
Term loan at 6.75%, payable in monthly
installments including interest through
November 1998 1,499 1,800
Capitalized leases, principally at prime,
payable in monthly installments through
2009 494 505
Term loan at prime plus 1% -- 620
-------- --------
Total 20,493 20,923
Less current maturities 6,654 8,452
-------- --------
Due after one year . ................ $ 13,839 $ 12,471
======== ========
</TABLE>
5
<PAGE>
1. Continued
MAY 3, November 3,
1996 1995
SUBORDINATED DEBENTURES:
Senior Subordinated Debentures,
8 3/4% due August 1, 1999....... $ 34,420 $ 34,430
Subordinated Extendible Debentures,
11%, due April 1, 2000
(Series C)...................... 2,523 2,757
Convertible Senior Subordinated
Debentures, 11-1/4% due October
1, 1997 ........................ 3,537 3,537
---------- --------
Total................... $ 40,480 $ 40,724
=========== ========
2. Primary earnings (loss) 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 applicable period.
Fully diluted earnings (loss) 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 applicable period, and the applicable period's
interest expense thereon, net of income taxes, was added to net income (loss)
for the applicable period.
3. At April 28, 1995, shares of common stock were reserved for possible issuance
as follows:
Conversion of 11-1/4% Convertible Senior
Subordinate Debentures ..................... 528,647
Stock options ................................... 858,099
Stock options granted to Chadbourne Corporation . 600,000
1990 Executive Stock Purchase Plan .............. 101,764
Directors' Deferred Stock Compensation Plan ..... 162,791
---------
Total ......................... 2,251,301
=========
4. Certain amounts have been reclassified to conform with 1996 presentation and
reflect discontinued operations. There is no effect on either net income or
common stockholders' equity.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS:
Net sales for the thirteen weeks ended May 3, 1996 decreased to
$58,780,000 as compared to $63,652,000 for the thirteen weeks ended April 28,
1995. This $4,872,000 (7.7%) decrease resulted from decreased sales of narrow
elastic fabrics ($2,440,000) and knitted apparel products ($4,046,000), which
were partially offset by higher finished fabrics sales ($1,614,000).
Year-to-date net sales for 1996 totaling $116,843,000 remained relatively flat
when compared to sales of $116,341,000 for the same twenty-six week period in
fiscal 1995. For fiscal 1996, the Company's Finished Fabrics division recorded
increased sales of $10.4 million, which were almost entirely offset by decreases
in the Kingstree Knit Apparel division of $6 million and the Texfi Narrow
Fabrics division of $4 million. Second quarter and year-to-date increases in
finished fabrics sales were attributable to strong demand and shipments for many
of this division's synthetic fabrics to ultimate sale into the women's wear and
junior girls fashion markets. Decreases in narrow fabrics sales related
primarily to the decline in sales of products sold in the intimate apparel and
insert apparel markets. A weak overall market for T-shirts as well as the
Kingstree Knit Apparel division's late deliveries of certain items to some of
its customers were the primary causes for its decreased sales.
For the comparable thirteen-week period, cost of goods sold, as a
percentage of net sales, increased from 88.0% in 1995 to 89.0% in 1996. For the
comparable twenty-six week period periods, cost of goods sold as a percentage of
net sales increased from 87.9% in 1995 to 88.3% in 1996. Reductions in cost of
goods sold as a percentage of sales in the Company's Finished Fabrics division
as a result of operating cost reductions were more than offset by increases in
cost of goods sold at the Company's Kingstree Knit Apparel and Texfi Narrow
Fabrics divisions. Due to the fixed nature of a significant portion of these
divisions' manufacturing costs, as sales at the Kingstree Knit Apparel and Texfi
Narrow Fabrics divisions decreased during the second quarter and first six
months of fiscal 1996, when compared to the comparable periods in fiscal 1995, a
corresponding decrease in manufacturing costs could not be achieved. In
addition, the Kingstree Knit Apparel division also experienced increased
manufacturing costs as a result of manufacturing inefficiencies resulting from
converting most of its sewing plants from bundle to modular or team sewing as
well as expediting orders to catch up on its late position with some of its
customers. In an effort to control its manufacturing costs, management has
decided to close one of Kingstree Knit Apparel division's four sewing
facilities. The Company does not expect to incur material costs in
connection with the closing of this leased facility.
7
<PAGE>
Selling, general and administrative expenses ("SG&A") increased from
7.0% to 8.2% as a percentage of sales for the thirteen weeks ended May 3, 1996
when compared to same period a year ago and increased from 7.4% to 7.7% for the
comparable twenty-six week periods. This increase, as a percentage of sales
during the second quarter, resulted primarily from increased selling costs at
the Company's Kingstree Knit Apparel division in order to expedite late
deliveries of product to some of its customers and to sell its products into a
weak overall market for T-shirts. In addition, as sales decreased, SG&A expenses
could not decrease at a comparable percentage because approximately 75% of SG&A
expenses are fixed in nature.
Interest expense decreased $493,000 (16.1%) from $3,054,000 during the
second thirteen-week period ended in 1995 to $2,561,000 in 1996. For the
comparable twenty-six week periods, interest expense decreased $1,010,000
(16.3%) from $6,185,000 to $5,175,000. These decreases resulted from a
combination of reduced long-term debt obligations of approximately $10 million
since April 28, 1995 and lower interest rates.
Both the 1995 second quarter and six months net losses were impacted by
a charge of $7,382,000 and $15,545,000, respectively, related to the
discontinuance of its Highland Yarn operations, Jefferson diaper and corduroy
production, and Marion Fabrics greige goods operations.
Financial Condition:
After adjusting the net loss of $558,000 incurred during the first two
fiscal quarters of 1996 for non-cash items and changes in operating assets and
liabilities, operating activities used net cash of $36.8 million. $44.5 million
of the total cash usage was attributable to the pay-off of factor advances,
which were applied against factor accounts receivable, with the proceeds of
revolving debt borrowings discussed below. The remaining cash usage was
generated as a result of the $558,000 net loss being adjusted to a cash basis
for depreciation and amortization ($4.2 million) and the provision for losses on
accounts receivable ($438,000), neither of which required cash, together with
increases in inventories ($1.6 million) and prepaid and other assets ($141,000)
and decreases in accounts payable and accrued liabilities ($2.5 million) which
were partially offset by decreases in accounts receivable, excluding factor
advances,($7.9 million). The net proceeds from the credit facility discussed
below ($58.2 million) and sales of property, plant and equipment ($2.0 million),
as well as cash on hand, provided funds used by operations, repaid long-term
debt and subordinated debentures ($19.6 million) and purchased equipment ($4.2
million).
8
<PAGE>
Working capital is comprised chiefly of inventories and accounts
receivable. Until negotiation of the credit facility discussed below, the
Company had maintained financing capacity for working capital and other general
corporate purposes under certain factoring agreements and other comparable
short-term borrowing arrangements. The amount reported on the November 3, 1995
balance sheet as "Due from Factor" represents accounts receivable with factors
net of funds advanced against eligible factor accounts receivable and
inventories.
At May 3, 1996, working capital equaled $44.3 million, an increase of $40.1
million from the fiscal year ended November 3, 1995. This increase in working
capital is due primarily to the $44.5 million pay-off of factor advances along
with increases in inventory ($1.6 million) as well as decreases in accounts
payable ($1.9 million) and current maturities of long-term debt ($1.8 million)
which more than offset decreases in cash ($410,000), accounts receivable,
excluding factor advances ($8.3 million), and property, plant and equipment held
for disposal ($927,000).
On March 15, 1996, the Company entered into a $74 million credit
facility. Net proceeds from the credit facility were applied towards the
previously existing term loan and outstanding factor advances. The new facility
consists of a $19 million term loan, payable in 30 equal monthly installments of
$500,000 and a balloon payment of $4.5 million in September 1998, and a
revolving credit line which can not exceed $54 million during the life of the
facility. As of May 3, 1996, funds available through the revolving credit line
approximated $8.2 million. The credit facility replaced the factor advances with
a revolving debt arrangement which expires on the same date as the term loan's
final maturity. The credit facility is secured by substantially all of the
Company's assets. The credit facility provides for the Company to elect interest
rates based upon either a CD, LIBOR or prime interest rate plus applicable
margin. The applicable margin is adjusted each fiscal year based upon the
Company's leverage ratio as defined in the credit facility. In addition, the
Company may elect interest periods ranging from 30 to 180 days depending upon
the various interest rate. As of May 3, 1996, the average interest rate for the
various elections held by the Company approximated 8.06% per annum. The facility
places limitations on the Company's rental expense, additional indebtedness,
acquisitions, capital expenditures, and sale or disposal of assets. The Company
is required to maintain a minimum net worth, as well as, to comply with certain
financial ratios, including current ratio, coverage ratio, and leverage ratio,
as defined by the facility. As a result of the loss the Company incurred during
the second quarter of fiscal 1996, the Company was not in compliance with either
its minimum net worth or coverage ratio covenants. The facility lenders have
waived the coverage ratio as of May 3, 1996 and the minimum net worth through
August 1, 1996.
9
<PAGE>
As of May 3, 1996 the Company has approximately $2.5 million of its
Series C Debentures outstanding. The annual interest rate on these debentures
may be adjusted at the sole discretion of the Company on April 1st of each year
until maturity in the year 2000. On March 1, 1996, the Company set the Series C
interest rate at 13% for the period April 1, 1996 through March 31, 1997. 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 April 1, 1996,
$234,000 of the Series C Debentures were redeemed at the option of the debenture
holders.
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 annual interest rate of these debentures is 8.75%, payable
semiannually on August 1 and February 1. 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. The Company is currently prohibited by this covenant from incurring
additional indebtedness primarily due to the $17.5 million charges to record
discontinued operations in fiscal 1995. The majority of the 8-3/4% debenture
holders consented to the replacement of the Company's credit facility with the
new facility.
The Company plans to place into service $7.7 million of machinery and
equipment during fiscal 1996. As of the end of the second fiscal quarter, $4.2
million had been expended on machinery and equipment purchases. This equipment
primarily will increase fabric dyeing and finishing capacity 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 which will not be reflected in
the Company's balance sheet.
Management believes cash flows from operations and funds available
through its revolving credit arrangement after amending the facility's covenants
to make them less restrictive, will provide the Company with sufficient sources
of funds to meet its 1996 cash needs and assuming no significant deterioration
in market conditions, for the foreseeable future.
10
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders:
The Registrant's Annual Meeting of Stockholders was held on March 12, 1996.
The proposals voted upon and the results of voting were as follows:
(1) Election of Class III Directors for a three-year term:
Votes Votes
for Withheld
Richard L. Kramer 5,378,312 12,670
John D. Mazzuto 5,378,312 12,670
All Class I and Class II Directors continue as previously reported.
(2) Proposal to approve ratification of Ernst & Young, LLP as independent
auditors for the fiscal year ending November 1, 1996.
Votes for: 5,383,327
Votes against: 5,621
Votes withheld: 2,034
11
<PAGE>
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits
Exhibits to this report are listed in the accompanying index
to exhibits.
(b) Reports on Form 8-K
On March 29, 1996, the Registrant filed Form 8-K Current
Report for Item 2 Acquisition or Disposition of Assets with
respect to the closing of its $74 million credit facility.
The Form 8-K included no financial information.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
TEXFI INDUSTRIES, INC.
(Registrant)
Date: June 17, 1996 By:S/Dane L. Vincent
-----------------
Dane L. Vincent
Chief Financial Officer
and Treasurer
13
<PAGE>
TEXFI INDUSTRIES, INC.
INDEX TO EXHIBITS
*2(a)(1) Credit agreement dated as of March 15, 1996 among
Registrant, as Borrower, certain Lenders referred to therein,
NationsBank, N.A., as Agent, and NationsBanc Commercial
Corporation, as Disbursing Agent, filed as Exhibit 2(a)(1) to
Registrant's Form 8-K Current Report as of March 15, 1996.
*2(a)(2) Security Agreement dated as of March 15, 1996 between
Registrant, as Grantor, and NationsBank, N.A., as Agent for
certain Lenders referred to therein, and NationsBanc
Commercial Corporation, as Disbursing Agent, filed as Exhibit
2(a)(2) to Registrant's Form 8-K Current Report as of March
15, 1996.
*2(a)(3) Form of Deed of Trust and Security Agreement (North
Carolina property) dated as of March 15, 1996 between
Registrant, as Grantor, TIM, Inc., as Trustee, and
NationsBank, N.A., as Beneficiary and Agent for certain
Lenders referred to therein, and NationsBanc Commercial
Corporation, as Disbursing Agent, filed as Exhibit 2(a)(3) to
Registrant's Form 8-K Current Report as of March 15, 1996.
*2(a)(4) Form of Mortgage and Security Agreement (South Carolina
property) dated as of March 15, 1996 between Registrant, as
Grantor, and NationsBank, N.A., as Beneficiary and Agent for
certain Lenders referred to therein, and NationsBanc
Commercial Corporation, as Disbursing Agent, filed as Exhibit
2(a)(4) to Registrant's Form 8-K Current Report as of March
15, 1996.
*2(a)(5) Deed to Secure Debt and Security Agreement (Georgia
property) dated as of March 15, 1996 between Registrant, as
Grantor, and NationsBank, N.A., as Beneficiary and Agent for
certain Lenders referred to therein, and NationsBanc
Commercial Corporation, as Disbursing Agent, filed as Exhibit
2(a)(5) to Registrant's Form 8-K Current Report as of March
15, 1996.
1
<PAGE>
*2(a)(6) Form of Assignment of Factoring Proceeds dated as of
March 15, 1996, filed as Exhibit 2(a)(6) to Registrant's Form
8-K Current Report as of March 15, 1996.
2(a)(7) First Amendment dated May 10, 1996 to the Credit
Agreement dated as of March 15, 1996 among Registrant, as
Borrower, certain Lenders referred to therein, NationsBank,
N.A., as Agent, and NationsBanc Commercial Corporation, as
Disbursing Agent.
2(a)(8) Waiver Agreement dated June 14, 1996 to the Credit
Agreement dated as of March 15, 1996 among Registrant, as
Borrower. certain Lenders, referred to therein, NationsBank,
N.A., as Agent, and NationsBanc Commercial Corporation, as
Disbursing Agent.
*4(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.
*4(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.
*4(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.
*4(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).
*4(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).
*4(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).
*4(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).
2
<PAGE>
*4(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).
*4(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.
*4(b)(1) Bylaws of Registrant, filed as Exhibit 4.6 to Registrant's
Form S-8 Registration Statement (No. 33-14697).
*4(b)(2) Amendment to Bylaws of Registrant, filed as Exhibit 4(b)(2) to
Registrant's Form S-2 Registration Statement (No. 33-16794).
*4(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.
*4(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.
*4(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(c)(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(c)(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.
*4(c)(3) Indenture dated October 1, 1991 between Registrant and The
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.
3
<PAGE>
*4(c)(4) Indenture dated September 8, 1993 between Registrant and The
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(c)(5) First Supplemental Indenture dated as of March 10, 1995,
between Registrant and First Union National Bank of North
Carolina, as Trustee, filed as Exhibit 4(a)(1) to Registrant's
Form 8-K Current Report as of March 15, 1996.
*4(c)(6) Second Supplemental Indenture dated as of March 15, 1996,
between Registrant and First Union National Bank of North
Carolina, as Trustee, filed as Exhibit 4(a)(2) to Registrant's
Form 8-K Current Report as of March 15, 1996.
*4(d)(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(e)(1) Rights Agreement dated July 22, 1988 between Registrant and
The 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(e)(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(e)(3) Amendment to Rights Agreement between Registrant and The
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(e)(4) Second Amendment to Rights Agreement dated May 24, 1994
between Registrant and The 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(e)(5) Third Amendment to Rights Agreement dated December 16, 1994
between Registrant and The 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.
11 Computation of Earnings Per Share
* Incorporated by reference to previous filing.
4
<PAGE>
FIRST AMENDMENT
THIS FIRST AMENDMENT (the "Amendment"), to the Credit Agreement
referred to below is entered into as of the 10th day of May, 1996, by and among
TEXFI INDUSTRIES, INC., a corporation organized under the laws of Delaware (the
"Borrower"), THE LENDERS signatory hereto (collectively, the "Lenders"),
NATIONSBANK, N.A., a national banking association, as Agent, and NATIONSBANC
COMMERCIAL CORPORATION, as Disbursing Agent (collectively, the "Agents").
STATEMENT OF PURPOSE
The Borrower, the Lenders and the Agents are parties to a certain
Credit Agreement dated as of March 15, 1996 (as amended hereby and as further
amended or modified, the "Credit Agreement"), pursuant to which the Lenders have
agreed to make, and have made, certain Loans to the Borrower. The Borrower, the
Lenders and the Agents have agreed to amend the Credit Agreement upon the terms
and conditions of this Amendment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto hereby agree as follows:
I. Amendments.
1. Section 1.1. Section 1.1 is hereby amended by amending
the definition of "CD Base Rate" to read as follows:
CD Base Rate" means the secondary market rate of interest for
certificates of deposit for a maturity equal to the Interest Period
selected which appears on the Telerate page entitled "Daily Selected
Money Market Rates from the Federal Reserve (currently, page 120) one
Business Day prior to the commencement of the applicable Interest
Period. If, for any reason, such rate is not available, then "CD Base
Rate" shall mean the rate per annum at which, in the opinion of the
Agent, the Agent can obtain funds in the national certificate of
deposit market in the amount of $5,000,000 one Business Day prior to
the commencement of the applicable Interest Period for a maturity equal
to the Interest Period selected.
2. Section 2.2.
(a) Section 2.2(b) is hereby amended by deleting clauses (i) - (iv)
thereof in their entirety and inserting the following in lieu thereof:
<PAGE>
(i) The Borrower shall, not later than 11:00 a.m.
(Charlotte time) (1) at least one Business Day before each
Base Rate Loan or CD Rate Loan and (2) at least three Business
Days before each LIBOR Rate Loan, give the Agent irrevocable
written notice in the form of a Notice of Revolving Credit
Loan Borrowing (or telephonic notice of such requested
borrowing promptly confirmed by such written notice)
specifying (A) the date of such borrowing, which shall be a
Business Day, (B) the amount of such borrowing, which shall be
with respect to LIBOR Rate Loans in the aggregate principal
amount of $3,000,000 or a whole multiple of $1,000,000 in
excess thereof and in the case of a CD Rate Loan in the
aggregate principal amount of $500,000 or any whole multiple
of $250,000 in excess thereof, (C) whether the Revolving
Credit Loans are to be Fixed Rate Loans or Base Rate Loans and
(D) in the case of a Fixed Rate Loan, the duration of the
Interest Period applicable thereto. Notices received after
11:00 a.m. (Charlotte time) shall be deemed received on the
next Business Day.
(ii) Upon receipt of each Notice of Revolving Credit
Loan Borrowing, the Agent shall request the Disbursing Agent
to calculate the Borrowing Base as of the date of such
proposed borrowing, based on the information set forth in the
then most current Borrowing Base Certificate furnished to the
Disbursing Agent by the Borrower pursuant to Section 2.2 (c)
and the Disbursing Agent's determination of the amount of
Eligible Accounts and the Disbursing Agent shall determine the
maximum amount of the Revolving Credit Loans to be made. If
the requested Loan is to be a Base Rate Loan, the Agent shall,
subject to Section 4.6, make the requested Loan on behalf of
the Lenders, and each such advance shall be deemed an advance
under and shall be evidenced by, the Revolving Credit Notes.
Each Lender hereby assigns to the Agent a ratable portion of
its respective Revolving Credit Note to the extent of the
Agent's unpaid funding obligations and interest accruing with
respect thereto as set forth in this Section 2.2(b) hereof
outstanding from time to time. Such assignment shall be
effective only to the extent of unpaid funding obligations and
accrued interest thereon due and payable at any time to the
Agent and shall in no event affect any commitment or other
fees due the Lenders hereunder.
- 2 -
<PAGE>
If the requested Loan is a Fixed Rate Loan, the Agent
shall, on the date of receipt of the Notice of Revolving
Credit Loan Borrowing, notify the Lenders of such request for
a Fixed Rate Loan, and not later than 2:00 p.m. (Charlotte
time) on the proposed borrowing date, each Lender will make
available to the Agent, for the account of the Borrower, at
the office of the Agent, such Lender's Commitment Percentage
of the Fixed Rate Loans to be made on such borrowing date.
Promptly after the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article
V, the Agent will (and each Lender hereby irrevocably
authorizes the Agent to) make such funds available to the
Borrower. Subject to Section 4.6 hereof, the Agent shall not
be obligated to disburse the proceeds of any Fixed Rate Loan
requested pursuant to this Section 2.2 until each Lender shall
have made available to the Agent its Commitment Percentage of
such Fixed Rate Loan.
The Agent will settle with the Lenders by accounting
for all sums advanced to the Borrower by the Agent (and not
reimbursed by the Lenders) and the proceeds of all Factoring
Credit Balances and other sums applied to the payment of such
advances, such settlement and accounting to occur on (A)
Tuesday of each week (or if any such Tuesday is not a Business
Day, on the next succeeding Business Day) and (B) on such
other date as the sum of all advances made by the Agent on
behalf of the Lenders and not reimbursed by the Lenders or
paid by the application of Factoring Credit Balances or other
sums received by the Agent for application against such
advances exceeds $5,000,000. The date of each such settlement
and accounting is referred to herein as the "Settlement Date."
Not later than 2:00 p.m. (Charlotte time) on the
Settlement Date, each Lender shall fund its Commitment
Percentage of the net amount of all advances by the Agent
outstanding after giving effect to the requested borrowing,
which amount shall thereafter be reflected on the books and
records of the Agent as Revolving Credit Loans of the Lenders
bearing interest at the Base Rate plus the Applicable Margin
until repaid, the occurrence of a Default or such Base Rate
Loans are converted to Fixed Rate Loans in accordance with
Section 4.2.
(iii) On each Business Day, the Disbursing Agent
shall transfer via Federal wire transfer to the Agent the
proceeds of all available Factoring
- 3 -
<PAGE>
Credit Balances, together with all other sums held by the
Disbursing Agent, which sums shall upon receipt be applied by
the Agent to the payment of first, all outstanding advances by
the Agent to the Borrower on behalf of the Lenders, and then
to the payment of all other Base Rate Loans then outstanding,
with the balance to be retained by the Agent pending
application as provided in this Agreement.
(iv) Each Lender acknowledges and agrees that its
obligation to fund interim advances made by the Agent in
accordance with the terms of this Section 2.2(b) is absolute
and that the obligations of all the Lenders to fund is
unconditional and shall not be affected by any circumstance
whatsoever.
(b) Section 2.2(d) is hereby amended by deleting the word
"Disbursing" from the third sentence thereof.
3. Section 2A5. Section 2A.5 is hereby amended by deleting
the word "Disbursing" from the fourth sentence thereof.
4. Section 3.4. Section 3.4(a) is hereby amended by
deleting the word "Disbursing" from the first sentence thereof.
5. Section 4.1. Section 4.1(a) is hereby amended by
deleting the word "Atlanta" from the second sentence thereof and
inserting in lieu thereof the word "Charlotte."
6. Section 4.2. Section 4.2 is hereby amended by deleting
such Section in its entirety and inserting the following in lieu
thereof:
Provided that no Default or Event of Default has occurred and is then
continuing, (a) the Borrower shall have the option to convert at any
time all or any portion of its outstanding Base Rate Loans in a
principal amount equal to $3,000,000 or any whole multiple of
$1,000,000 in excess thereof into one or more LIBOR Rate Loans and in a
principal amount equal to $500,000 or any whole multiple of $250,000 in
excess thereof into one or more CD Rate Loans (b) upon the expiration
of any Interest Period, the Borrower may, or pursuant to Section 4.1(d)
shall, convert all or any portion of its outstanding Fixed Rate Loans
into Base Rate Loans in a principal amount equal to $500,000 or any
whole multiple of $250,000 in excess thereof or continue such Fixed
Rate Loans as Fixed Rate Loans. Whenever the Borrower desires to
convert or continue Loans as provided above, the Borrower shall give
the Agent irrevocable prior written notice in the form attached as
Exhibit C (a "Notice of Conversion/Continuation") not later than 11:00
a.m. (Charlotte time) three (3) Business Days, in the event of
- 4 -
<PAGE>
a conversion to or continuation as LIBOR Rate Loans, and one (1)
Business Day, in the event of a conversion to Base Rate Loans or CD
Rate Loans, before the day on which a proposed conversion or
continuation of such Loan is to be effective specifying (i) the Loans
to be converted or continued, and, in the case of a Fixed Rate Loan to
be converted or continued, the last day of the Interest Period
therefor, (ii) the effective date of such conversion or continuation
(which shall be a Business Day), (iii) the principal amount of such
Loans to be converted or continued and (iv) the Interest Period to be
applicable to such converted or continued Fixed Rate Loan. The Agent
shall promptly notify the Lenders of such Notice of
Conversion/Continuation. If, within the time period required under the
terms of this Section 4.2, the Agent does not receive a Notice of
Conversion/Continuation from the Borrower containing an election to
continue Fixed Rate Loans for an additional Interest Period or to
convert such Fixed Rate Loans, then, upon the expiration of the
Interest Period therefor, such Loans will be automatically converted to
Base Rate Loans.
7. Section 4.4. Section 4.4 is hereby amended by deleting the word
"Atlanta" from the first, second and third sentences thereof, by inserting the
words "or Agent" after the words "Disbursing Agent" in line 4 thereof, and by
deleting the word "Disbursing" from lines 6, 8, 15 and 18 thereof.
8. Section 4.6. Section 4.6 is hereby amended by deleting the word
"Disbursing" from the second, fourth, fifth and sixth sentences thereof, and by
inserting the words "the Agent, from and after May ___, 1996" in the third
sentence thereof after the words "on the Closing Date and."
9. Section 4.7.
(a) Section 4.7(a) is hereby amended by deleting the word
"Disbursing" from the first and second sentences thereof.
(b) Section 4.7(b) is hereby amended by deleting the word
"Disbursing" from the first sentence thereof.
(c) Section 4.7(c) is hereby amended by deleting the word "Disbursing"
from lines 5, 7, 12, 15 and 16 of the last paragraph thereof.
10. Exhibits. Exhibit B-1 (Notice of Revolving Credit Loan
Borrowing) and Exhibit C (Notice of Conversion/Continuation) to the
Credit Agreement are hereby amended by deleting them in their
entirety and substituting Schedules 1 and 2 hereto in lieu thereof.
- 5 -
<PAGE>
II. Confirmation; Conditions to Effectiveness.
1. Representations and Warranties. In order to induce the Lenders and
the Agents to execute this Amendment, the Borrower hereby confirms that each
representation and warranty made by it under the Loan Documents is true and
correct as of the date hereof and that no Default or Event of Default has
occurred and is continuing under the Credit Agreement. The Borrower hereby
represents and warrants that as of the date hereof there are no claims or
offsets against or defenses or counterclaims to its obligations under the Credit
Agreement or any other Loan Document.
2. Conditions to Effectiveness. This Amendment shall become
effective upon completion of the following conditions to the
satisfaction of the Agents:
(a) receipt by the Agents of an originally executed copy of
this Amendment; and
(b) receipt by the Agents of any other document or instrument
reasonably requested by it in connection with the
execution of this Amendment.
III. General Provisions.
1. Limited Amendment. Except as expressly amended herein, the Credit
Agreement and each other Loan Document shall continue to be, and shall remain,
in full force and effect. This Amendment shall not be deemed (i) to be a waiver
of, or consent to, or a modification or amendment of, any other term or
condition of the Credit Agreement or (ii) to prejudice any other right or rights
which the Agents or any Lender may now have or may have in the future under or
in connection with the Credit Agreement or the Loan Documents or any of the
instruments or agreements referred to therein, as the same may be amended or
modified from time to time.
2. Counterparts. This Amendment may be executed by one or
more of the parties hereto in any number of separate counterparts
and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
3. Definitions. All capitalized terms used and not defined
herein shall have the meanings given thereto in the Credit
Agreement.
4. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NORTH CAROLINA.
- 6 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
BORROWER:
TEXFI INDUSTRIES, INC.
By:
Name:
Title:
LENDERS:
NATIONSBANK, N.A.
By:
Name:
Title:
MELLON BANK, N.A.
By:
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By:
Name:
Title:
- 7 -
<PAGE>
CORESTATES BANK, N.A.
By:
Name:
Title:
FLEET BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
NATIONAL BANK OF CANADA
By:
Name:
Title:
By:
Name:
Title:
AGENT:
NATIONSBANK, N.A.
By:
Name:
Title:
- 8 -
<PAGE>
DISBURSING AGENT:
NATIONSBANC COMMERCIAL CORPORATION
By:
Name:
Title:
- 9 -
<PAGE>
<PAGE>
WAIVER AGREEMENT
THIS WAIVER AGREEMENT (the "Agreement") is made and entered into as of
the 14th day of June, 1996 between TEXFI INDUSTRIES, INC., a corporation
organized under the laws of Delaware (the "Borrower"), THE LENDERS SIGNATORY
HERETO (collectively, the "Lenders") NATIONSBANK, N.A., a national banking
association, as Agent and NATIONSBANC COMMERCIAL CORPORATION, as Disbursing
Agent (collectively, the "Agents").
THE STATEMENT OF PURPOSE
The Borrower, the Lenders and the Agents are parties to a certain
Credit Agreement dated as of March 15, 1996, as heretofore amended (as so
amended, the "Credit Agreement", pursuant to which the Lenders have agreed to
make, and have made, certain Loans to the Borrower. The Lenders have agreed to
waive compliance by the Borrower with certain of the covenants contained in the
Credit Agreement, all as more particularly set forth herein.
NOW THEREFORE, in consideration of the premises and other good and
value consideration, the parties do hereby agree as follows:
I. WAIVER.
The Lenders hereby waive compliance by the Borrower with Section 9.3 of
the Credit Agreement as of May 3, 1996, the end of the second quarter of the
Borrower's 1996 fiscal year and compliance by the Borrower with Section 9.4
through the penultimate day of the third quarter of Borrower's 1996 fiscal year.
II. CONFIRMATION.
To induce the Lenders and the Agents to execute this Waiver, the
Borrower hereby confirms that each representation and warranty made by it under
the Loan Documents is true and correct as of the date hereof and that after
giving effect to this Agreement, no Default or Event of Default exists under the
Credit Agreement. The Borrower hereby represents and warrants that as of the
date hereof there are no claims or counterclaims to its obligations under the
Credit Agreement or any other Loan Document.
III. GENERAL PROVISIONS.
1. Limited Waiver. Except as expressly provided herein, the Credit
Agreement and each other Loan Document shall continue to be, and shall remain,
in full force and effect. This Agreement shall not be deemed (i) to be a waiver
of, or consent to, or a modification or amendment of, any other term or
condition of the Credit Agreement or (ii) to prejudice any other right or rights
which the Agents or any Lender may now have or may have in the future under or
in connection with the Credit Agreement or the other Loan Documents or any of
the instruments or agreements referred to therein, as the same may be amended or
modified from time to time.
<PAGE>
2. Counterparts. This Agreement may be executed by one or
more of the parties hereto in any number of separate counterparts
and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
3. Definitions. All capitalized terms used and not defined
herein shall have the meanings given thereto in the Credit
Agreement.
4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NORTH CAROLINA.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
BORROWER:
TEXFI INDUSTRIES, INC.
By: /s/______________________
Name: Dane L. Vincent
Title: V.P., CFO & Treasurer
LENDERS:
NATIONSBANK, N.A.
By: /s/______________________
Name: Joseph R. Netzel
Title: Vice President
MELLON BANK, N.A.
By: _________________________
Name:____________________
Title: __________________
THE FIRST NATIONAL BANK OF BOSTON
By: /s/______________________
Name: William C. Purinton
Title: Vice President
<PAGE>
CORESTATES BANK, N.A.
By: /s/______________________
Name: Marcus F. Brown
Title: V.P.
FLEET BANK, NATIONAL ASSOCIATION
By: /s/______________________
Name: Jody L. Gorin
Title: Vice President
NATIONAL BANK OF CANADA
By: /s/_________ /s/_________
Name: C. COLLIE ALEX M. COUNCIL IV
Title: VP & MGR VICE PRESIDENT
AGENT:
NATIONSBANK, N.A.
By: /s/______________________
Name: Joseph R. Netzel
Title: Vice President
DISBURSING AGENT:
NationsBanc Commercial Corporation
By: /s/______________________
Name: Kenneth D. Frasier
Title: Vice President
<PAGE>
EXHIBIT 11
TEXFI INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
THIRTEEN WEEKS ENDED TWENTY-SIX WEEKS ENDED
MAY 3, April 28, MAY 3, April 28,
1996 1995 1996 1995
---------- --------- ----------- -------
<S> <C> <C> <C> <C>
NUMBER OF SHARES OF COMMON STOCK OUTSTANDING:
Balance at beginning of period ................. 8,650,690 8,650,621 8,650,690 8,652,621
Deferred compensation.......................... 84,801 3,069 84,801 3,069
Restricted Stock Forfeitures.................... -- (3,000) -- (5,000)
---------- ----------- ------------ -----------
Balance at end of period ..................... 8,735,491 8,650,690 8,735,491 8,650,690
========== =========== ============ ===========
PRIMARY:
Net income (loss) from continuing operations.... $ (974,000) $( 72,000) $ (558,000) $ (699,000)
Net loss from discontinued operations........... -- (7,382,000) -- (15,545,000)
------------ ----------- ----------- -----------
Net loss applicable to common
stockholders ................................. $ (974,000) $(7,310,000) $ (558,000) $(16,244,000)
============= =========== ============= ============
Weighted average number of shares outstanding:
Common stock outstanding for the period
based on a daily weighted average ........... 8,663,037 8,652,767 8,656,863 8,652,683
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 ............... 8,663,037 8,652,767 8,656,863 8,652,683
=========== =========== ============= ===========
Per common share amounts:
Net income (loss) from continuing operations $ (.11) $ .01 $ (.07) $ (.08)
Net loss from discontinued operations..... -- (.85) -- (1.80)
----------- -------- --------- ---------
Net loss.................................. $ (.11) $(.84) $ (.07) $ (1.88)
=========== ======== ========== =========
FULLY DILUTED:
Net income(loss) from continuing operations.....$ 974,000 $ 72,000 $ (558,000) $ (699,000)
Net loss from discontinued operations........... -- (7,382,000) -- (15,545,000)
------------ ----------- ------------- ------------
Net loss applicable to common
stockholders .................................$ 974,000 $(7,310,000) $ (558,000) $(16,244,000)
============ =========== ============= ============
Weighted average number of shares outstanding:
Common stock outstanding for the period based
on a daily weighted average .................. 8,663,037 8,652,767 8,656,863 8,652,683
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 .................... -- -- -- --
------------ ------------ ------------- -------
8,663,037 8,652,767 8,656,863 8,652,683
Increase in common shares assuming conversion
of the 11-1/4% Convertible Senior Subordinated
Debentures .................................. -- -- -- --
------------ ------------- ------------ ------
Weighted average number of common and common
equivalent shares outstanding ................... 8,663,037 8,652,767 8,656,863 8,652,683
============ ============ ============ ===========
Per common share amounts: Excluding convertible debenture shares:
Net income (loss) from continuing operations $ (.11) $ .01 $ (.07) $ (.08)
Net loss from discontinued operations....... -- (.85) -- (1.80)
------- ------- ------- ------
Net loss.................................. $ (.11) $ (.84) $ (.07) $(1.88)
======= ======= ======= ======
Including Convertible Debenture Shares:
Net income (loss) from continuing operations $ (.11) $ .01 $ (.07) $ (.08)
Net loss from discontinued operations....... -- $ (.85) -- (1.80)
------ ------- -------- -------
Net loss.................................. $ (.11) $ (.84) $ (.07) $(1.88)
======= ======= ======== =======
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-1-1996
<PERIOD-END> MAY-3-1996
<PERIOD-START> FEB-3-1996
<CASH> 337
<SECURITIES> 0
<RECEIVABLES> 46,779
<ALLOWANCES> 1,409
<INVENTORY> 29,724
<CURRENT-ASSETS> 78,117
<PP&E> 110,595
<DEPRECIATION> 60,578
<TOTAL-ASSETS> 132,443
<CURRENT-LIABILITIES> 33,798
<BONDS> 40,480
0
0
<COMMON> 33,921
<OTHER-SE> (30,040)
<TOTAL-LIABILITY-AND-EQUITY> 132,443
<SALES> 116,843
<TOTAL-REVENUES> 116,843
<CGS> 103,210
<TOTAL-COSTS> 112,176
<OTHER-EXPENSES> 50
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,175
<INCOME-PRETAX> (558)
<INCOME-TAX> 0
<INCOME-CONTINUING> (558)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (558)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
</TABLE>
