<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 March 28, 1998 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 30286-0004
- --------------------------------------------------------------------------------
(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 710,838 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> 2
INDEX
THOMASTON MILLS, INC. AND SUBSIDIARY
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets -- March 28, 1998 and June 28,
1997
Condensed consolidated statements of operations -- three months ended
March 28, 1998 and three months ended March 29, 1997 and nine months
ended March 28, 1998 and nine months ended March 29, 1997.
Condensed consolidated statements of changes in cash flows -- nine
months ended March 28, 1998 and nine months ended March 29, 1997.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Change in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a vote of Security Holders
Item 5. Other information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
THOMASTON MILLS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
<TABLE>
<CAPTION>
Mar. 28, 1998 June 28, 1997
------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash & cash equivalents $ 1,482 $ 1,886
Accounts receivable, less allowance of
$500 at both dates 43,219 50,140
Inventories--Note B 56,524 48,729
Other current assets 6,792 4,995
-------- --------
TOTAL CURRENT ASSETS 108,017 105,750
PROPERTY, PLANT AND EQUIPMENT 252,150 247,506
Less allowance for depreciation 167,961 158,133
-------- --------
84,189 89,373
OTHER ASSETS 2,419 2,574
-------- --------
$194,625 $197,697
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 13,715 $ 16,060
Accrued liabilities 8,255 8,529
Current portion of long-term debt
and capital lease obligations 2,999 3,034
-------- --------
TOTAL CURRENT LIABILITIES 24,969 27,623
OBLIGATIONS UNDER CAPITAL LEASE -
LESS CURRENT PORTION 1,470 1,100
LONG-TERM DEBT 68,463 62,917
DEFERRED INCOME TAXES 5,758 5,757
OTHER LIABILITIES 1,018 839
SHAREHOLDERS' EQUITY
Class A Common Stock--5,610,518 shares
outstanding including 710,838 treasury shares at
March 28, 1998 and 710,888 treasury shares at 5,621 5,621
June 28, 1997
Class B Common Stock--1,873,506 shares
outstanding including 243,140 treasury shares 1,873 1,873
Additional paid-in capital 8,904 8,904
Retained earnings 81,969 88,483
-------- --------
98,367 104,881
Less treasury stock - at cost 5,420 5,420
-------- --------
92,947 99,461
-------- --------
$194,625 $197,697
======== ========
</TABLE>
NOTE: The Balance Sheet at June 28, 1997 has been derived from the Audited
Financial Statements at that date. See Notes to Condensed Financial Statements.
<PAGE> 4
THOMASTON MILLS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands except Share and Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
MAR. 28, 1998 Mar. 29, 1997 MAR. 28,1998 Mar. 29, 1997
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Net sales $ 68,710 $ 70,730 $ 209,958 $ 207,815
Cost of sales 66,644 67,445 199,387 195,812
----------- ----------- ----------- -----------
2,066 3,285 10,571 12,003
Selling, general
and administrative expenses 5,037 5,724 15,106 15,856
----------- ----------- ----------- -----------
(2,971) (2,439) (4,535) (3,853)
Other income (expense)-net 79 120 254 283
----------- ----------- ----------- -----------
(2,892) (2,319) (4,281) (3,570)
Interest expense 1,310 672 3,852 2,458
----------- ----------- ----------- -----------
Income (loss) before
income taxes (4,202) (2,991) (8,133) (6,028)
Provision for income taxes
(benefit) (1,596) (1,136) (3,090) (2,290)
----------- ----------- ----------- -----------
Net income (loss) $ (2,606) $ (1,855) $ (5,043) $ (3,738)
=========== =========== =========== ===========
Weighted Average Number of Shares - Basic 6,540,042 6,539,996 6,540,042 6,539,996
Basic earnings (loss) per share $ (0.4000) $ (0.2800) $ (0.7700) $ (0.5700)
Weighted Average Number of Shares - Diluted 6,540,042 6,539,996 6,540,042 6,539,996
Diluted earnings (loss) per share $ (0.4000) $ (0.2800) $ (0.7700) $ (0.5700)
Dividends paid per share $ 0.0750 $ 0.0750 $ 0.2250 $ 0.2250
</TABLE>
<PAGE> 5
THOMASTON MILLS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED Nine Months Ended
MARCH 28, 1998 March 29, 1997
----------------- -----------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (5,043) $ (3,738)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization 12,811 13,561
Gain on sale of property, plant
and equipment (2) (7)
Changes in operating assets and
liabilities:
Accounts receivable 6,921 5,421
Inventories (7,795) (9,902)
Other assets (1,640) (3,014)
Accounts payable and accrued expenses (2,441) (1,841)
-------- --------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 2,811 480
INVESTING ACTIVITIES
Purchases of property, plant and equipment (7,627) (9,963)
Less capital lease obligations incurred 664 0
-------- --------
Cash for property, plant and equipment (6,963) (9,963)
Proceeds from sales of property, plant
and equipment 2 11
-------- --------
NET CASH USED IN INVESTING
ACTIVITIES (6,961) (9,952)
FINANCING ACTIVITIES
Proceeds from revolving lines of credit
and long-term debt 8,664 33,000
Less capital lease obligations incurred (664) 0
-------- --------
Cash proceeds from borrowings 8,000 33,000
Principal payments on revolving lines of
credit, long-term debt and capital lease
obligations (2,782) (22,836)
Cash dividends paid (1,472) (1,472)
-------- --------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 3,746 8,692
-------- --------
DECREASE IN CASH
AND CASH EQUIVALENTS (404) (780)
Cash and cash equivalents at beginning
of period 1,886 2,077
-------- --------
Cash and cash equivalents at end
of period $ 1,482 $ 1,297
======== ========
</TABLE>
<PAGE> 6
THOMASTON MILLS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 28, 1998
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 and nine month periods
ended March 28, 1998 are not necessarily indicative of the results that may be
expected for the year ending June 27, 1998. Certain Fiscal 1997 balances have
been reclassified to conform with the Fiscal 1998 classifications. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report for the year ended June 28,
1997.
NOTE B -- INVENTORIES
The components of inventory consist of the following:
<TABLE>
<CAPTION>
(Dollars in Thousands)
MARCH 28, 1998 June 28, 1997
-------------- -------------
<S> <C> <C>
Raw materials $ 7,588 $ 9,197
Work in process 32,423 32,012
Finished products 31,735 22,742
LIFO reserve (15,222) (15,222)
------------- -------------
$ 56,524 $ 48,729
============= =============
</TABLE>
<PAGE> 7
NOTE C -- NET INCOME (LOSS) PER COMMON SHARE
The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 128
"Earnings per Share" in its second quarter ended on December 27, 1997. SFAS No.
128 replaced the previously reported primary and fully diluted earnings per
share with basic and diluted earnings per share. Unlike primary earnings per
share, basic earnings per share excludes any dilutive effects of options,
warrants and convertible securities. Diluted earnings per share is very similar
to the previously reported fully diluted earnings per share. All earnings per
share amounts for all periods have been presented, and where necessary, restated
to conform to SFAS No. 128 requirements.
The following table sets forth the computation of the numerator and denominator
used in the calculation of basic and diluted earnings per share:
<TABLE>
<CAPTION>
(Dollars in Thousands except Share and Per Share Date)
Three Months Ended Nine Months Ended
Mar. 28, 1998 Mar. 29, 1997 Mar. 28, 1998 Mar. 29, 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Numerator:
Net income (loss) from continuing operations $ (2,606) $ (1,855) $ (5,043) $ (3,738)
----------- ----------- ----------- -----------
Numerator for basic and diluted earnings per share $ (2,606) $ (1,855) $ (5,043) $ (3,738)
----------- ----------- ----------- -----------
Denominator:
Denominator for basic earnings per share -
Weighted average shares 6,540,042 6,539,996 6,540,042 6,539,996
Dilutive effect of potential common shares -
Employee stock options N/A N/A N/A N/A
----------- ----------- ----------- -----------
Denominator for diluted earnings per share -
adjusted weighted-average shares and
assumed conversions 6,540,042 6,539,996 6,540,042 6,539,996
----------- ----------- ----------- -----------
Basic Earnings (loss) per share $ (0.4000) $ (0.2800) $ (0.7700) $ (0.5700)
----------- ----------- ----------- -----------
Diluted earnings (loss) per share $ (0.4000) $ (0.2800) $ (0.7700) $ (0.5700)
----------- ----------- ----------- -----------
Potentially dilutive common shares related to
options outstanding:
Not considered in calculation due to net loss 14,283 7,737 9,166 7,062
----------- ----------- ----------- -----------
Not considered in calculation due to average
price of Company's common stock exceeding
exercise price of options 594,163 530,264 596,738 535,421
----------- ----------- ----------- -----------
</TABLE>
<PAGE> 8
THOMASTON MILLS, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
Sales for the third fiscal quarter ended March 28, 1998 were down 2.9% from
third quarter sales last year; although sales for the most recent nine month
period are 1.0% ahead of nine-month sales a year ago. For the third quarter this
year, sales were $68,710,000 as compared to sales of $70,730,000 for third
quarter last year. For the nine months ended March 28, 1998, sales were
$209,958,000 compared to sales of $207,815,000 for the nine months ended March
29, 1997. On a quarter to quarter comparison and on a nine months to nine months
comparison, a sales increase in the Company's Industrial group was more than
offset by decreases in sales in the Consumer and Apparel markets.
Cost of goods sold was 97.0% of sales for the third quarter and 95.0% of sales
for the nine months ended March 28, 1998. For the third quarter and nine month
period last year, cost of goods sold was 95.4% of sales and 94.2% of sales,
respectively. Lower sales levels have caused the Company's manufacturing
facilities to operate at below optimum capacity levels. This low capacity
utilization and the resulting higher fixed costs per unit have offset declines
the Company has experienced in raw material costs.
Gross profit for the third fiscal quarter was 3.0% of sales as compared to 4.6%
of sales for the third quarter last year. For the most recent nine months, gross
profit was 5.0% of sales. For the nine month period last year, gross profit was
5.8% of sales. Decreased sales and increased cost of goods sold resulted in
decreased profit margins.
Selling, general and administrative expenses were 7.3% of sales for the third
quarter this year and 8.1% of sales for the third quarter last year. For the
nine months ended March 28, 1998, selling, general and administrative expenses
were 7.2% of sales as compared to 7.6% of sales for the nine months ended March
29, 1997. The Company strives to maintain selling, general and administrative
expenses at a low percentage of sales ratio.
Other income was $79,000 in the third quarter and $254,000 for the first nine
months of fiscal year 1998 as compared to $120,000 in third quarter and $283,000
for the first nine months of fiscal year 1997. Other income relates to
miscellaneous equipment sales and interest earned on the Company's short-term
investments of cash.
Interest expense increased from $672,000 in third quarter fiscal year 1997 to
$1,310,000 in third quarter fiscal year 1998. For the first nine months of
fiscal year 1998, interest expense was $3,852,000 as compared to $2,458,000 for
the first nine months of fiscal year 1997. This increase was the result of
capitalized interest during the first nine months of last year and increased
borrowings under the Company's various credit agreements during the first nine
months of this year.
Income tax expense (benefit) for the third quarter and first nine months of
fiscal years 1998 and 1997 was 38% of taxable income (loss), which approximates
the statutory income tax rate for the tax jurisdictions in which the Company
operates.
<PAGE> 9
The Company had a net loss of $2,606,000 or $.40 per basic and diluted share
for the third quarter and $5,043,000 or $.77 per basic and diluted share for the
first nine months of fiscal year 1998. Net loss for the comparable quarter and
nine months last year was $1,855,000 or $.28 per basic and diluted share and
$3,738,000 or $.57 per basic and diluted share, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company continues to maintain a strong financial position. At March 28,1998,
working capital was $83,048,000 as compared to $79,459,000 at March 29, 1997.
The ratio of current assets to current liabilities was 4.33:1 at March 28, 1998
and 4.34:1 at March 29, 1997.
Financing activities provided cash flow of $3,746,000 during the nine months
ended March 28, 1998, while net cash provided by operating activities was
$2,811,000. The primary use of funds was $6,961,000 in purchases of property,
plant and equipment.
During first quarter fiscal year 1997, the Company completed the financing for
an expansion of the Lakeside Comforter Plant and an addition of a new dye range.
This project began in the fourth quarter of fiscal year 1996. Financing was
provided with $18,000,000 in taxable Industrial Revenue Bonds issued through the
Thomaston-Upson County Industrial Development Authority. These bonds will be
retired over a fifteen year period with only interest payable for the first
three years. Proceeds from the sale of the bonds were applied to the Company's
revolving credit facility until needed for the project.
During the fourth quarter of fiscal year 1997, the Company revised and expanded
its revolving credit agreement with a group of banks to provide for unsecured
borrowings of up to $39,000,000. At March 28, 1998, $4,000,000 was unborrowed
and available under this agreement.
INVENTORIES
Inventories at March 28,1998 and March 29,1997 were $56,524,000 and $52,612,000,
respectively. Total inventory turns on an average annualized rate were 4.7 times
for the first nine months of fiscal year 1998 and 5.0 times for the first nine
months of fiscal year 1997.
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
<PAGE> 10
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 ten-year period. Tariffs on textiles will be cut by an average of 11.6% over
ten 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.
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.
YEAR 2000
Many companies are currently in the process of determining what corrective
measures, if any, need to be taken in order to ensure that their computer
systems will not be disrupted by the Year 2000 problem. The problem is one where
many computer systems in use today have codes programmed to read dates as two
digits. These programs, if not corrected, could fail or create erroneous
results by or at the Year 2000.
In 1997 the Company formed a Year 2000 Project Team to assess the potential
effect of the Year 2000 issue on the Company's operations. The Project Team has
sought, and continues to seek, identify and evaluate Year 2000-related
compliance issues, develop proposed solutions, and estimate the costs of the
implementation of such solutions. Anticipated spending for the year 2000 date
conversion project will be expensed as incurred or new software will be
capitalized and amortized over the software's useful life and is not expected
to have a significant impact on the Company's results of operations.
In order to minimize the risk of business interruption to the Company and its
customers, business partners and suppliers, the Project Team is in the process
of obtaining written assurances from third parties, on whose systems the
Company's operations are dependent, that their systems will be Year 2000
compliant prior to the end of 1999.
Project completion is planned for the middle of calendar year 1999. However,
there can be no assurance that the Company will not experience disruptions
related to the Year 2000 problem, that the systems of other companies on which
the Company's systems rely will be converted on a timely basis or that any such
failure by another company to convert would not have an adverse effect on the
Company's systems.
FORWARD-LOOKING STATEMENTS
Certain of the above statements contained herein under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1996. Such forward-looking statements
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such factors include, among other
things, business conditions, volatility of commodities markets, ability to
control operating costs, developing successful new products and maintaining
effective pricing and promotion of its products.
<PAGE> 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
(a) As of March 28,1998, 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
(a) (b) (c) (d) Not applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
13.1 Quarterly Report to Shareholders dated March 28,
1998.
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 March 28, 1998.
<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.
/s/Neil H. Hightower
--------------------------------------
Neil H. Hightower
President and Chief
Date: May 12, 1998 Executive Officer
--------------------------
/s/Rosser R. Raines
--------------------------------------
Rosser R. Raines
Treasurer-Principal Financial
Date: May 12, 1998 Officer
--------------------------
<PAGE> 1
EXHIBIT 13.1
NEWS
RELEASE
THIRD QUARTER REPORT
1998
TO THE SHAREHOLDERS:
Financial results for the third fiscal quarter at Thomaston Mills were
disappointing. Sales were $68,710,000, down 2.9% from the year before, and the
Company lost $2,606,000 or $.40 per share.
The denim market continues to be oversupplied causing unsatisfactory pricing
and capacity utilization. Yarn volume has improved but prices are
unsatisfactory. Imports have also impacted our markets and caused a reduction
in volume in the discount store portion of our consumer products business.
On the positive side, raw material prices are lower, and capacity utilization
is improving. Market week in New York was a success, and the new line of
consumer products was well received. Shipments of Thomaston pure cotton
250-count sheets will begin in the fourth fiscal quarter.
The Company's performance has been frustrating to stockholders, management and
employees. All of our problems are solvable, and we are all committed to
strengthening the Company and making Thomaston Mills a rewarding investment.
Sincerely,
/s/ Neil H. Hightower
Neil H. Hightower
President and CEO
April 21, 1998
[THOMASTON MILLS, INC. LETTERHEAD]
POST OFFICE BOX 311
THOMASTON, GEORGIA 30286-0004
<PAGE> 2
THOMASTON MILLS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 28, March 29, March 28, March 29,
1998 1997 1998 1997
=====================================================================================================================
<S> <C> <C> <C> <C>
Net sales $ 68,710 $ 70,730 $ 209,958 $ 207,815
Cost of sales 66,644 67,445 199,387 195,812
- ---------------------------------------------------------------------------------------------------------------------
2,066 3,285 10,571 12,003
Selling, general and administrative expenses 5,037 5,724 15,106 15,856
Other income (expense)-net 79 120 254 283
- ---------------------------------------------------------------------------------------------------------------------
(2,892) (2,319) (4,281) (3,570)
Interest expense 1,310 672 3,852 2,458
- ---------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes (4,202) (2,991) (8,133) (6,028)
Provision for income taxes (benefit) (1,596) (1,136) (3,090) (2,290)
- ---------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (2,606) $ (1,855) $ (5,043) $ (3,738)
=====================================================================================================================
Average Number of Shares 6,540,042 6,539,996 6,540,042 6,539,996
Basic and diluted earnings (loss) per share $ (0.4000) $ (0.2800) $ (0.7700) $ (0.5700)
Dividends paid per share $ 0.0750 $ 0.0750 $ 0.2250 $ 0.2250
=====================================================================================================================
</TABLE>
CONDENSED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
March 28, March 29,
1998 1997
=====================================================================================================================
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 1,482 $ 1,297
Accounts receivable 43,719 45,402
Less allowance for uncollectible accounts (500) (415)
Inventories 56,524 52,612
Other current assets 6,792 4,349
- ---------------------------------------------------------------------------------------------------------------------
Total Current Assets 108,017 103,245
Property, Plant and Equipment 252,150 243,227
Less allowance for depreciation (167,961) (156,206)
Other assets 2,419 2,306
- ---------------------------------------------------------------------------------------------------------------------
$ 194,625 $ 192,572
=====================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 13,715 $ 13,217
Accrued liabilities 8,255 7,545
Current portion of capital lease obligations 351 376
Current portion of long-term debt 2,648 2,648
- ---------------------------------------------------------------------------------------------------------------------
Total Current Liabilities 24,969 23,786
Obligations under capital leases 1,470 1,203
Long-term debt 68,463 56,612
Deferred income taxes 5,758 6,874
Other liabilities 1,018 236
Shareholders' Equity 92,947 103,861
- ---------------------------------------------------------------------------------------------------------------------
$ 194,625 $ 192,572
=====================================================================================================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-27-1998
<PERIOD-START> JUN-29-1997
<PERIOD-END> MAR-28-1998
<CASH> 1,482
<SECURITIES> 0
<RECEIVABLES> 43,719
<ALLOWANCES> 500
<INVENTORY> 56,524
<CURRENT-ASSETS> 108,017
<PP&E> 252,150
<DEPRECIATION> 167,961
<TOTAL-ASSETS> 194,625
<CURRENT-LIABILITIES> 24,969
<BONDS> 33,463
0
0
<COMMON> 7,494
<OTHER-SE> 85,453
<TOTAL-LIABILITY-AND-EQUITY> 194,625
<SALES> 68,710
<TOTAL-REVENUES> 68,789
<CGS> 66,644
<TOTAL-COSTS> 66,644
<OTHER-EXPENSES> 5,037
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,310
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