<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended December 30, 1995 Commission File No. 0-1915
THOMASTON MILLS, INC.
- --------------------------------------------------------------------------------
GEORGIA 58-0460470
- -------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
115 East Main Street, P.O. Box 311, Thomaston, Georgia 30286
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (706) 647-7131.
---------------
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the close of the period covered by this report.
Class A Common Stock $1 Par Value - 5,620,518 Shares including
713,688 Treasury Shares
Class B Common Stock $1 Par Value - 1,873,506 Shares including
243,140 Treasury Shares
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 for the past 90 days.
Yes X No
------------ -----------
Page 1 of 12
<PAGE> 2
INDEX
THOMASTON MILLS, INC. AND SUBSIDIARY
<TABLE>
<S> <C>
PART 1. FINANCIAL INFORMATION
- ------- ---------------------
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets -- December 30, 1995
and July 1, 1995.
Condensed consolidated statements of operations -- three months
ended December 30, 1995 and three months ended December 31, 1994;
and six months ended December 30, 1995 and six months ended
December 31, 1994.
Condensed consolidated statements of changes in cash flows --
six months ended December 30, 1995 and six months ended
December 31, 1994.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
PART II. OTHER INFORMATION
- -------- -----------------
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to vote of Security Holders
Item 5. Other information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
- ----------
</TABLE>
Page 2 of 12
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
THOMASTON MILLS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
DEC. 30, 1995 July 1, 1995
------------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash & cash equivalents $ 1,380 $ 1,544
Accounts receivable, less allowance of
$415 at both dates 39,197 50,924
Inventories--Note B 44,736 39,666
Other current assets 1,476 1,191
------------- ------------
TOTAL CURRENT ASSETS 86,789 93,325
PROPERTY, PLANT AND EQUIPMENT 224,452 225,353
Less allowances for depreciation 137,101 136,719
------------- ------------
87,351 88,634
OTHER ASSETS 1,385 4,364
------------- ------------
$ 175,525 $ 186,323
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 8,244 $ 14,214
Accrued liabilities 5,107 6,164
Federal and State income taxes 0 1,131
Current portion of long-term debt 3,203 1,082
------------- ------------
TOTAL CURRENT LIABILITIES 16,554 22,591
OBLIGATIONS UNDER CAPITAL LEASE -
LESS CURRENT PORTION 1,075 1,297
LONG-TERM DEBT 41,455 44,813
DEFERRED INCOME TAXES 7,233 7,233
OTHER LIABILITIES 148 114
SHAREHOLDERS' EQUITY
Class A Common Stock--5,620,518 shares
outstanding including 713,688 treasury shares at
December 30, 1995 and 719,688 at July 1, 1995 5,621 5,621
Class B Common Stock--1,873,506 shares
outstanding including 243,140 treasury shares 1,874 1,874
Additional paid-in capital 8,882 8,862
Retained earnings 98,119 99,389
------------- ------------
114,496 115,746
Less treasury stock - at cost 5,436 5,471
------------- ------------
109,060 110,275
------------- ------------
$ 175,525 $ 186,323
============= ============
</TABLE>
NOTE: The Balance Sheet at July 1, 1995 has been derived from the Audited
Financial Statements at that date. See Note to Condensed Financial Statements.
Page 3 of 12
<PAGE> 4
THOMASTON MILLS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
DEC. 30, 1995 Dec. 31, 1994 DEC. 30, 1995 Dec. 31, 1994
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales $ 61,385 $ 67,051 $ 129,981 $ 135,606
Cost of sales 57,244 61,628 119,246 124,176
---------- ---------- ----------- ----------
4,141 5,423 10,735 11,430
Selling, general
and administrative expenses 4,918 4,645 10,001 9,310
---------- ---------- ----------- ----------
(717) 778 734 2,120
Other income (expense) 113 108 313 225
---------- ---------- ----------- ----------
(664) 886 1,047 2,345
Interest expense 791 726 1,566 1,449
---------- ---------- ----------- ----------
Income (loss) before
income taxes (1,455) 160 (519) 896
Provision for income taxes
(benefits) (553) 62 (197) 346
---------- ---------- ----------- ----------
Net income (loss) $ (902) $ 98 $ (322) $ 550
========== ========== =========== ==========
AVERAGE NUMBER OF SHARES 6,537,196 6,499,258 6,536,603 6,534,293
Data Per Share:
Net income $ (0) $ 0 $ (0) $ 0
Dividends paid $ 0 $ 0 $ 0 $ 0
</TABLE>
Page 4 of 12
<PAGE> 5
THOMASTON MILLS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED Six Months Ended
DECEMBER 30, 1995 December 31, 1994
----------------- -----------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income (loss) $ (322) $ 550
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 8,361 7,595
Loss (Gain) on sale of property, plant
and equipment 7 (23)
Provision for deferred income taxes 0 0
Changes in operating assets and
liabilities:
Accounts receivable 11,727 15,571
Inventories (5,070) (2,882)
Other assets (547) (69)
Accounts payable and accrued expenses (7,669) (6,781)
----------------- -----------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 6,487 13,961
INVESTING ACTIVITIES
Purchases of property, plant and equipment (7,085) (7,471)
Decrease in unexpended construction funds 3,242 0
Proceeds from sales of property, plant
and equipment 0 94
----------------- -----------------
NET CASH USED IN INVESTING
ACTIVITIES (3,843) (7,377)
FINANCING ACTIVITIES
Proceeds from revolving lines of credit
and long-term debt 2,000 5,000
Principal payments on revolving lines of credit,
long-term debt and capital lease obligations (3,913) (9,681)
Purchase of treasury stock 0 (392)
Exercise of stock options 54 61
Cash dividends paid (948) (915)
----------------- -----------------
NET CASH USED IN
FINANCING ACTIVITIES (2,807) (5,927)
----------------- -----------------
(DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS (163) 657
Cash and cash equivalents at beginning
of period 1,543 1,110
----------------- -----------------
Cash and cash equivalents at end
of period $ 1,380 $ 1,767
================= =================
</TABLE>
Page 5 of 12
<PAGE> 6
THOMASTON MILLS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 30, 1995
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the three month
period ended December 30, 1995, are not necessarily indicative of the results
that may be expected for the year ended June 29, 1996. Certain Fiscal 1995
balances have been reclassified to conform with the Fiscal 1996
classifications. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report for
the year ended July 1, 1995.
NOTE B -- INVENTORIES
The components of inventory consist of the following:
<TABLE>
<CAPTION>
(Dollars in Thousands)
DECEMBER 30, 1995 July 1, 1995
----------------- ------------
<S> <C> <C>
Raw materials $ 8,108 $ 10,087
Work in process 22,880 21,008
Finished products 26,656 21,199
LIFO reserve (12,908) (12,628)
------------- ------------
$ 44,736 $ 39,666
============= ============
</TABLE>
Through July 2, 1994 the Company accounted for the cotton, polyester, labor and
overhead components of raw materials, work in process and finished goods
inventories at the lower of cost, determined under the LIFO method of
accounting, or market. Purchased cloth and yarn and certain supplies
inventories were accounted for at the lower of cost, determined under the FIFO
method of accounting, or market. In the first quarter of Fiscal 1995, the
Company changed to the LIFO method of accounting for purchased cloth and yarn.
This change will result in better matching of revenues and expenses and will
conform substantially all manufacturing inventories to the LIFO method. The
cumulative effect of this change is not determinable. The effect of this
change on the second quarter and the first six months of fiscal year 1995 was
to decrease net income by approximately $172,000 ($.03 per share) and $295,000
($.05 per share) respectively. In connection with this change, the Company
conformed the manner of applying the LIFO method for its cotton and polyester
inventories to the dollar value method. Management believes the effect of the
change to the dollar value method was not significant.
Page 6 of 12
<PAGE> 7
THOMASTON MILLS, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
Sales for the second fiscal quarter ended December 30, 1995 declined 8.4% to
$61,385,000 as compared to sales of $67,051,000 for the second quarter last
year. For the first six months of fiscal year 1996, sales were $129,981,000,
down 4.1% from sales of $135,606,000 for the first six months of fiscal year
1995. A slowdown in the markets served by Thomaston Mills resulted in a
decline of 11.6% in units shipped for the second quarter and a 7.2% decline in
units shipped for the six months when compared to the comparable periods last
year. Each of the Company's product groups, Consumer, Industrial and Apparel
experienced declines in the number of units shipped. Increases of 3.5% in
product mix average sales value per unit for the quarter and 3.3% for the six
months only partially offset the decreases in units shipped.
Cost of goods sold increased to 93.3% of sales for second quarter and 91.7% of
sales for the first six months of fiscal year 1996 as compared to cost of goods
sold of 91.9% and 91.6% of sales for the second quarter and first six months of
fiscal year 1995, respectively. These increases in cost of goods sold were
primarily attributable to increased raw material prices and low capacity
utilization of plant facilities. During the quarter and six months ended
December 30, 1995, the Company experienced raw material price increases of
23.7% and 23.3% respectively. Due to slow markets, the Company was able to
pass only a portion of these raw material price increases on to its customers.
In order to control inventories in a declining sales environment, the Company
reduced its capacity utilization which resulted in higher fixed costs per unit.
Decreased sales and increased cost of goods sold resulted in gross profit of
$4,141,000 or 6.7% of sales for second quarter and $10,735,000 or 8.3% of sales
for the first six months of fiscal year 1996. For the second quarter and first
six months of fiscal year 1995, gross profit was $5,423,000 or 8.1% of sales
and $11,430,000 or 8.4% of sales respectively.
Selling, general and administrative expenses were $4,918,000 or 8.0% of sales
in second quarter and $10,001,000 or 7.7% of sales in the first six months of
fiscal year 1996. Selling, general and administrative expenses for the second
quarter and first six months of fiscal year 1995 were $4,645,000 or 6.9% of
sales and $9,310,000 or 6.9% of sales respectively. These increases in
selling, general and administrative expenses can be attributed to the
implementation of a planned strengthening of the Company's design, sales and
marketing function.
Other income was $113,000 in second quarter and $313,000 for the first six
months of fiscal year 1996 as compared to $108,000 in second quarter and
$225,000 for the first six months of fiscal year 1995.
Interest expense increased $65,000 from $726,000 in second quarter fiscal year
1995 to $791,000 in second quarter fiscal year 1996. For the first six months
of fiscal year 1996, interest expense was $1,566,000 as compared to $1,449,000
for the first six months last
Page 7 of 12
<PAGE> 8
year. This increase was primarily the result of slightly higher interest rates
and additional borrowings under the Company's revolving credit agreement.
Income tax expense decreased for the quarter and six months ended December 30,
1995 as compared to the quarter and six months ended December 31, 1994. This
decrease is the result of the statutory tax rates being applied to the pretax
loss.
The Company lost $902,000 or $.14 per share for the second quarter and $322,000
or $.05 per share for the first six months of fiscal year 1996. Net income for
the comparable quarter and six months last year was $98,000 or $.02 per share
and $550,000 or $.08 per share respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company continues to maintain a strong financial position. At December 30,
1995, working capital was $70,235,000 as compared to $67,177,000 at December
31, 1994. The ratio of current assets to current liabilities was 5.24:1 at
December 30, 1995 and 5.31:1 at December 31, 1994.
Cash provided by operating activities totaling $6,487,000 was the principal
source of funds for the six months ended December 30, 1995.
The Company's primary use of funds during the first six months of fiscal year
1996 was $7,085,000 in purchases of property, plant and equipment, offset by a
$3,242,000 decrease in unexpended construction funds. During this same six
month period, the Company made net principal payments of $1,913,000 on its
revolving lines of credit, long-term debt and capital lease obligations.
During the latter part of fiscal year 1995, the Company placed orders for
additional equipment which has increased denim production capacity by
approximately twenty per cent. To finance the expansion of the denim
production, the Company on April 5, 1995 entered into an agreement with the
Development Authority of Pike County, Georgia to issue $3,700,000 in
Tax-Exempt Adjustable Mode Industrial Development Revenue Bonds. Interest on
these bonds is paid quarterly. The maturity date of the bond issue is April
2005. At December 30, 1995, the Company had $326,000 in unexpended
construction funds related to this bond issue.
During the second quarter of fiscal year 1995, the Company revised and expanded
its revolving credit agreement which provides for unsecured borrowings of up to
$24,000,000. At December 30, 1995, $3,500,000 was available under this
agreement.
The Company had capital expenditure commitments at December 30, 1995 for $4.0
million, primarily for machinery and equipment. Management believes that cash
provided by operating activities and the revolving credit agreement will be
sufficient to finance capital requirements and operating needs of the Company
for fiscal 1996.
INVENTORIES
Inventories at December 30, 1995 and December 31, 1994 were $44,736,000 and
$39,384,000 respectively. This increase in inventory is the result of the
general slowdown in the Company's markets and also a buildup in finished goods
to cover orders with a
Page 8 of 12
<PAGE> 9
January 1996 ship date. Total inventory turns on an average annualized rate
were 5.3 times for the first six months of fiscal year 1996 and 6.3 times for
the first six months of fiscal year 1995.
Through July 2, 1994 the Company accounted for the cotton, polyester, labor and
overhead components of raw materials, work in process and finished goods
inventories at the lower of cost, determined under the LIFO method of
accounting, or market. Purchased cloth and yarn and certain supplies
inventories were accounted for at the lower of cost, determined under the FIFO
method of accounting, or market. Effective with the first day of fiscal year
1995, the Company changed to the LIFO method of accounting for purchased cloth
and yarn. This change will result in better matching of revenues and expenses
and will conform substantially all manufacturing inventories to the LIFO
method. The cumulative effect of this change is not determinable. The effect
of this change on the first six months of fiscal year 1995 was to decrease net
income by approximately $295,000 ($.05 per share). In connection with this
change, the Company conformed the manner of applying the LIFO method for its
cotton and polyester inventories to the dollar value method. Management
believes the effect of the change to the dollar value method was not
significant.
RAW MATERIALS
The Company's primary raw material is cotton. As a commodity, cotton is traded
on established markets and periodically experiences price fluctuations. The
Company monitors the cotton market and buys its cotton from brokers. The
Company has not had and does not anticipate any material difficulty in
obtaining cotton.
In order to assure a continuous supply of cotton, the Company enters into
cotton purchase contracts for several months in advance of delivery which
either provide for (1) fixed quantities to be purchased at a pre-determined
price, or (2) fixed quantities to be purchased at a price to be determined (at
a later date). When the Company sells its product to its customers, the cost
of cotton under existing cotton purchase contracts is taken into account in
calculating the price for the Company's product. The Company generally
attempts to match product sales contracts with fixed price cotton purchase
contracts and uses market price cotton contracts to anticipate future needs and
subsequent product sales contracts. To the extent prices are sometimes fixed
in advance of shipment, the Company may benefit from its cotton purchase
contracts, to the extent prices thereafter rise, or incur increased cost, to
the extent prices thereafter fall.
GATT
In December 1993, 117 countries reached an agreement under the General
Agreement on Tariffs and Trade that would cover new areas of trade, further cut
tariffs and strengthen multilateral free-trade rules by creating a World Trade
Organization (WTO) as its successor. This agreement was ratified by the United
States Congress and went into effect on July 1, 1995. As part of this new
agreement, the Multifiber Arrangement (MFA) under which textile and apparel
trade had been controlled, will be phased out along with its import quotas over
a 10-year period. Tariffs on textiles will be cut by an average of 11.6% over
10 years. A weighted average tariff for products sold by Thomaston Mills, if
imported, would be cut by 8.8%. Under the agreement, quotas on the least
sensitive import products will be phased out over the first five years and
quotas on the most sensitive import products will not be affected until the
latter part of the ten-year period.
Page 9 of 12
<PAGE> 10
The WTO agreement contains some provisions which may have a favorable impact on
the textile industry. An assembly rule of origin amendment makes it illegal
for a non-WTO member country to assemble garments from pieces cut in a member
country and then export the garments as originating in the country where they
were cut. Additionally, the agreement preserves the authority of the President
of the United States to control imports from non-WTO countries such as Taiwan
or China.
Although the WTO agreement may reduce the cost of certain imported textiles,
the Company believes that upgraded technology resulting in increased
productivity and lower costs will enable it to compete in a global market.
BACKLOG
The Company's order backlog at December 30, 1995 was $123.7 million which
represents an increase of 13.8% when compared to the backlog of $108.7 million
at July 1, 1995.
Page 10 of 12
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
(a) As of December 30, 1995, there were no material pending legal
proceedings, other than routine litigation incidental to its
business, to which the Company was a party or to which any
property of the Company was subject. Such routine legal
proceedings are not believed to be material to the Company.
(b) Not applicable
ITEM 2. CHANGE IN SECURITIES
(a) (b) Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
(a) (b) Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The election of directors and selection of Ernst & Young as the
Company's Independent auditors were approved by the holders of the
Company's Class B Common Stock at the Annual Meeting of Shareholders
held on October 5, 1995. Set forth below are the results of the
voting:
<TABLE>
<CAPTION>
Votes Votes
For Against Abstentions
----- ------- -----------
<S> <C> <C> <C>
Election of Directors
Thomas D. Adams, Jr. 1,506,844 -0-
C. Ronald Barfield 1,506,844 -0-
Archie H. Davis 1,506,844 -0-
H. Stewart Davis 1,506,844 -0-
George H. Hightower 1,506,844 -0-
George H. Hightower, Jr. 1,506,844 -0-
Neil H. Hightower 1,506,844 -0-
William H. Hightower 1,506,844 -0-
Rosser R. Raines 1,506,844 -0-
Dr. Jerry M. Williamson 1,506,844 -0-
Dom H. Wyant 1,506,844 -0-
Selection of Ernst & Young 1,485,388 1,010 -0-
</TABLE>
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
13.1 Quarterly Report to Shareholders dated December 30, 1995
27.0 Financial Data Schedule (for SEC purposes only)
(b) The Company did not file any reports on Form 8-K during the three
months ended December 30, 1995.
Page 11 of 12
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Thomaston Mills, Inc.
Neil H. Hightower
-----------------
Neil H. Hightower
President and Chief
Date: February 14, 1996 Executive Officer
-----------------
Rosser R. Raines
----------------
Rosser R. Raines
Treasurer-Principal Financial
Date: February 14, 1996 Officer
-----------------
Page 12 of 12
<PAGE> 1
[LOGO, THOMASTON FABRICS] NEWS
RELEASE
SECOND QUARTER REPORT
1996
TO THE SHAREHOLDERS:
Markets for textile products have been difficult, and Thomaston Mills' results
for the quarter ended December 30, 1995 were disappointing.
Sales for the quarter were $61,385,000, down 8 per cent from the year before,
and the Company experienced an after tax loss for the quarter of $902,000, or
$.14 per share. For the six months, sales were $129,981,000, down 4 per cent,
and the Company lost $322,000, or $.05 per share.
Low capacity utilization in consumer products and sales yarn caused per unit
fixed cost to rise sharply during the quarter, and prices were not adequate to
offset higher raw material costs, which were significantly higher than the year
before. Denim sales were also not as strong as planned.
Current conditions are a classic example of why it is important for a textile
company to maintain a strong balance sheet. Thomaston Mills has one of the
strongest balance sheets in the textile industry and is well prepared to
weather the current storm. We are hopeful that the current textile slowness is
short term. We have imposed strict cost control measures and will make every
effort to return the Company to profitability as soon as possible.
Long term we continue very optimistic about the prospects for Thomaston Mills.
We are continuing to invest in state-of-the-art equipment that will keep
Thomaston Mills competitive in the future. We are fast becoming the low cost
producer, and we are positioning the Company's product lines into less import
sensitive markets. We have also strengthened our sales and marketing functions
with the addition of styling and marketing talent in New York.
As market conditions improve and supply and demand for our products become more
balanced, Thomaston Mills' sales and earnings should rebound.
Sincerely,
/s/ Neil H. Hightower
Neil H. Hightower
President and CEO
January 23, 1996 THOMASTON MILLS, INC.
Post Office Box 311
THOMASTON, GEORGIA 30286
<PAGE> 2
THOMASTON MILLS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
DEC. 30, DEC. 31, DEC. 30, DEC. 31,
1995 1994 1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 61,385 $ 67,051 $ 129,981 $ 135,606
Cost of Sales 57,244 61,628 119,246 124,176
--------------------------------------------------------------------------------------------------------------------
4,141 5,423 10,735 11,430
Selling, general and administrative expenses 4,918 4,645 10,001 9,310
Other income (expense) 113 108 313 225
--------------------------------------------------------------------------------------------------------------------
(664) 886 1,047 2,345
Interest expense 791 726 1,566 1,449
--------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes (1,455) 160 (519) 896
Provision for income taxes (benefit) (553) 62 (197) 346
--------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (902) $ 98 $ (322) $ 550
====================================================================================================================
Average Number Shares 6,537,196 6,499,258 6,536,603 6,534,293
Net income (loss) per share $ (0.1400) $ 0.0200 $ (0.0500) $ 0.0800
Dividends paid per share $ 0.0725 $ 0.0700 $ 0.1450 $ 0.1400
</TABLE>
CONDENSED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
DEC. 30, DEC. 31,
1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 1,380 $ 1,767
Accounts receivable 39,612 41,002
Less allowance for uncollectible accounts (415) (415)
Inventories 44,736 39,384
Other current assets 1,476 1,042
--------------------------------------------------------------------------------------------------------------------
Total Current Assets 86,789 82,780
Property, Plant and Equipment 224,452 213,592
Less allowance for depreciation (137,101) (129,788)
Other assets 1,385 590
--------------------------------------------------------------------------------------------------------------------
$175,525 $167,174
====================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 8,244 $ 8,518
Accrued liabilities 5,107 4,783
Federal and state income taxes 0 80
Current portion of capital lease obligations 455 416
Current portion of long-term debt 2,748 1,806
--------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 16,554 15,603
Obligations under capital leases 1,075 1,561
Long-term debt 41,455 35,004
Deferred income taxes 7,233 6,571
Other liabilities 148 103
Shareholders' Equity 109,060 108,332
--------------------------------------------------------------------------------------------------------------------
$175,525 $167,174
====================================================================================================================
</TABLE>
Note: As previously reported, in the first quarter of fiscal 1995 the Company
changed from the FIFO to the LIFO method of accounting for purchased cloth and
yarn. The cumulative effect of this change was not determinable. The effect
of this change on the quarter and six months was to decrease net income by
approximately $172,000 ($.03 per share) and $295,000 ($.05 per share)
respectively.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF THOMASTON MILLS, INC. FOR THE SIX MONTHS ENDED DECEMBER
30,1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-29-1996
<PERIOD-START> JUL-02-1995
<PERIOD-END> DEC-30-1995
<CASH> 1,380
<SECURITIES> 0
<RECEIVABLES> 39,612
<ALLOWANCES> 415
<INVENTORY> 44,736
<CURRENT-ASSETS> 86,789
<PP&E> 224,452
<DEPRECIATION> 137,101
<TOTAL-ASSETS> 175,525
<CURRENT-LIABILITIES> 16,554
<BONDS> 20,956
0
0
<COMMON> 7,495
<OTHER-SE> 101,565
<TOTAL-LIABILITY-AND-EQUITY> 175,525
<SALES> 129,981
<TOTAL-REVENUES> 130,294
<CGS> 119,246
<TOTAL-COSTS> 119,246
<OTHER-EXPENSES> 10,001
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,566
<INCOME-PRETAX> (519)
<INCOME-TAX> (197)
<INCOME-CONTINUING> (322)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (322)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
