SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One) | ||
[X] | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2003 | ||
OR | ||
[ ] | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from __________ to ____________ | ||
Commission File No. 1-15381 | ||
A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: | |
Retirement Savings Value Plan for Employees of WestPoint Stevens Inc. | ||
B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: | |
WestPoint Stevens Inc. | ||
507 West 10th Street | ||
West Point, Georgia 31833 |
TABLE OF CONTENTS
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SUPPLEMENTAL SCHEDULE | |
17 | |
Management Pension Committee
WestPoint Stevens Inc.
We have audited the accompanying statement of net assets available for plan benefits of the Retirement Savings Value Plan for Employees of WestPoint Stevens Inc. as of December 31, 2003, and the related statement of changes in net assets available for plan benefits for the year then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. The 2002 financial statements were reported on by other auditors whose report dated June 23, 2003 on the statements disclaimed an opinion for the reasons described in the following paragraph.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 2003, and the changes in its net assets available for plan benefits for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2003, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ Smith & Howard, P.C. |
June 14, 2004
WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2003 AND 2002
2003 | 2002 | |||||
Receivables: | ||||||
Participant contributions | $ | 63,327 | $ | 77,582 | ||
Employer contributions | 15,821 | 19,020 | ||||
79,148 | 96,602 | |||||
Investments: | ||||||
Ownership interest in the net pooled assets of |
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Participant loans | 2,416,434 | 2,248,281 | ||||
Total Assets | 113,420,555 | 107,084,132 | ||||
LIABILITIES | ||||||
Fees and other Payables | 184,988 | 223,790 | ||||
NET ASSETS AVAILABLE FOR PLAN | $ | 113,235,567 | $ | 106,860,342 | ||
The accompanying notes are an integral part of these financial statements.
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WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 2003 AND 2002
Contributions: | ||
Employer | $ | 1,876,850 |
Participant | 9,393,002 | |
Rollovers | 61,883 | |
11,331,735 | ||
Plan's interest in investment results of the |
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20,297,878 | ||
Deductions from Net Assets Attributed to: | ||
Administrative and other expenses | (739,291) | |
Benefits paid to participants | (13,183,362) | |
(13,922,653) | ||
Net Increase | 6,375,225 | |
Net Assets Available for Plan Benefits at |
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Net Assets Available for Plan Benefits at |
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The accompanying notes are an integral part of these financial statements.
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WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE 1 - DESCRIPTION OF THE PLAN
The following brief description of the Retirement Savings Value Plan for Employees of WestPoint Stevens Inc., as amended and restated (the "Plan"), is provided for general information purposes only. Participants should refer to the Plan Document for a more complete description of the Plan's provisions.
General
The Plan is a voluntary defined contribution Plan for substantially all salaried and non-salaried employees of WestPoint Stevens Inc. and certain of its subsidiaries (the "Sponsor"). The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Trust Agreement
The assets of the Plan are held for safekeeping and investment by State Street Bank (the "Trustee") as part of a trust agreement between the Sponsor and the Trustee.
Contributions
Each active Plan participant may make contributions up to a maximum of 50% of his or her compensation on a before-tax basis, and up to a maximum of 50% on an after-tax basis, as long as the sum of the after-tax and before-tax percentages does not exceed 50% of the Plan participant's compensation. Plan participant contributions made on a before-tax basis under Section 401(k) of the Internal Revenue Code (the "Code") could not exceed the elective contribution limit of $12,000 during 2003. Contributions by highly compensated employees are subject to additional restrictions.
Effective August 1, 2002, all Plan participants who have attained or will attain age 50 on or before the last day of a Plan year became eligible to make catch-up contributions in accordance with Section 414(v) of the Code.
The Sponsor matches 50% of each Plan participant's before tax contributions not to exceed 1% of the Plan participant's gross wages. The Plan Sponsor made matching contributions of $1,876,850 in 2003.
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WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE 1 - DESCRIPTION OF THE PLAN (Continued)
Participant Accounts
Each participant's account is credited with the participant's contribution and allocations of the Sponsor contributions and Plan investment results. Forfeited balances of terminated participants' nonvested accounts are used to reduce future Sponsor contributions. The balance of forfeited nonvested accounts was $112,993 and $93,058 as of December 31, 2003 and 2002, respectively. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account.
Net Assets Available for Benefits
The WestPoint Stevens Inc. Retirement Savings Value Plan Master Trust (the "WPS Master Trust"), maintained by the Trustee, holds certain assets of the Retirement Savings Value Plan for Employees of WestPoint Stevens Inc. ("the Plan").
See Note 4 for a summary of the WPS Master Trust net assets as of December 31, 2003 and 2002, including the allocation of the WPS Master Trust net assets to the Plan and the related share of net investment income (losses) of the WPS Master Trust allocated to the participants of the Plan for the year ended December 31, 2003.
Vesting
Plan participants are fully vested with regard to their employee contributions. Plan participants are fully vested in Sponsor contributions after three years of service, upon attainment of age 65, or termination due to death or total and permanent disability.
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WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE 1 - DESCRIPTION OF THE PLAN (Continued)
Loans
Participants may borrow from their vested balance in the Plan. The minimum loan amount is $1,000. The loan is to be secured by the participant's assets in the Plan and the maximum loan amount is the lesser of 50% of the borrower's vested account balance immediately after securing the loan or $50,000. The maximum term of a general loan is 5 years, and the maximum term of a residential loan is 15 years. The interest rate is to be based primarily on the rate of interest that one or more local banks or other lending institutions would charge on a similar loan, taking into account, among other things, the collateral secured to pledge the loan.
Payment of Benefits
If a participant terminates employment prior to attaining age 55, other than for reasons of total and permanent disability, plan benefits are payable to a participant in a single lump sum distribution. If a participant terminates employment after attaining age 55 or by reason of total and permanent disability, plan benefits are payable to a participant in a single lump sum, in installments, or in a combination of the two methods. If a Plan participant elects to make a withdrawal, which is less than the full amount available for withdrawal, the amounts withdrawn will be made in the following order:
(a) | the amount of all the participant's after-tax contributions to the Plan plus earnings (or minus losses) thereon to the extent not previously withdrawn; |
(b) | the balance of the participant's rollover contribution account plus earnings (or minus losses) thereon to the extent not previously withdrawn; |
(c) | in the event of hardship, the amount of before-tax contributions, after-tax contributions, and rollover contribution; |
(d) | after attaining age 59-1/2, the entire amount in the before-tax contribution, after-tax contribution and rollover contribution account; and |
(e) | after attaining age 70-1/2, the entire amount in the employer matching contribution account and profit sharing contribution account. |
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WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE 1 - DESCRIPTION OF THE PLAN (Continued)
Payment of Benefits (Continued)
Hardship withdrawals are available in the following circumstances: (a) medical expenses for Plan participant, spouse, or dependents; (b) payment of tuition for post-secondary education for Plan participant, spouse, or dependent; (c) purchase of a principal residence; and (d) payment of amounts necessary to prevent foreclosure of mortgage on, or eviction from, Plan participant's principal residence. The WestPoint Stevens Inc. Management Pension Committee (the "Pension Committee") shall determine whether the requisite financial hardship exists in accordance with the requirements of the Internal Revenue Code and regulations thereunder. A participant making a hardship withdrawal is ineligible to contribute to the Plan for the next six months from the date of receipt of the withdrawal.
Plan Termination
While the Sponsor has not expressed any intent to do so, the Pension Committee retains the right to terminate the Plan at any time, subject to the provisions of ERISA. In the event a decision is made by the Pension Committee to terminate the Plan, all participants shall receive full distributions of the balances in their accounts or the Pension Committee may instruct the Trustee to continue to manage the assets for a set period of time.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared based on the accrual method of accounting with investments carried at fair values or contract values, which approximate fair value, as described below.
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WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Valuation of Investments
The WestPoint Stevens Company Stock Fund is valued at its fair value as determined by national stock exchange closing prices. The Stable Value Fund consists primarily of guaranteed investment contracts which are valued at contract value. The other funds, which consist of the following: SSGA Equity Index Fund; Aggressive Equity Fund, which is made up of the SSGA U.S. Large Cap Growth, MAS Small Cap Value, and Brokerage Stocks; Balanced Fund; International Fund; Value Fund; and Bond Market Fund, are valued at their redemption prices (fair values). Generally, the fair values are based on national stock exchange closing prices or other published sources. The Participant Loans are valued at cost.
Guaranteed investment contracts ("GIC") are subject to credit risk based on the ability of the issuers to meet interest or principal payments, or both, as they become due. Certain GICs included in the WestPoint Stevens Master Trust are synthetic; that is, the WestPoint Stevens Master Trust owns certain securities and the contract issuer provides a "wrapper" that guarantees a fixed rate of return and provides benefit responsiveness. At December 31, 2003 and 2002, the fair value of the underlying assets of the synthetic GICs (as determined from quoted market prices) were $3,900,801 and $20,329,751, respectively, and the values of the related wrapper contracts were $(304,815) and $(1,503,195), respectively.
The guaranteed investment contracts are recorded at their contract values, which represent contributions and reinvested income, less any withdrawals plus accrued interest, because these investments have fully benefit-responsive features. For example, participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. However, withdrawals influenced by Sponsor-initiated events, such as in connection with the sale of a business, may result in a distribution at other than contract value. There are no reserves against contract values for credit risk of contract issuer or otherwise. The fair value of the guaranteed investment contracts excluding the fair value of the synthetic GICs at December 31, 2003 and 2002 was $64,213,174 and $49,339,392, respectively. The average yield was approximately 5.02% and 4.51% in 2003 and 2002, respectively. The credited interest rates for those guaranteed investment contracts are reset annually by the issuer b ut cannot be less than zero and ranged from .93% to 5.74% at December 31, 2003 and 1.52% to 5.87% at December 31, 2002.
Purchases and sales of securities are reflected on the trade dates. Dividend income is recorded on the ex-dividend date. Income from other investments is recorded as earned.
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WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Administrative Expenses
All administrative and investment expenses are paid by the Plan.
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Party-in-Interest Transactions
Since April 2, 2001, certain Plan assets included in the Company Stock Fund, Bond Market Fund, S&P 500 Index Fund, ULCG Opportunities Fund, and the Equity Index Fund were managed by State Street Bank and Trust Company ("State Street"). As State Street is the trustee, as defined by the Plan, transactions involving these investments are party-in-interest transactions. In addition, transactions involving the Company Stock Fund, which invests in the common stock of the Parent, also qualify as party-in-interest transactions.
NOTE 3 - INCOME TAX STATUS
The Internal Revenue Service ruled on January 29, 2003 that the Plan qualifies under Section 401 (a) of the Internal Revenue Code ("IRC") and, therefore, the related trust is exempt from taxation. The Plan has been amended since receiving the determination letter. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan Sponsor believes the Plan is being operated in compliance with applicable requirements of the IRC and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax exempt.
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WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE 4 - INVESTMENTS
The Retirement Savings Value Plan for Employees of WestPoint Stevens Inc. held a 100% ownership interest in the net-pooled assets of the master trust at December 31, 2003 and 2002.
Net assets of the WestPoint Stevens Master Trust are as follows:
December 31, | |||||
2003 | 2002 | ||||
Pooled assets | |||||
Company Stock Fund: | |||||
WestPoint Stevens Inc. Common Stock | $ | -- | $ | 3,048,501 | |
State Street Bank & Trust Cash | -- | 651,959 | |||
Short-Term Investment Fund: | |||||
State Street Bank & Trust | 1,639,693 | 2,725,062 | |||
Guaranteed Investment Contracts: | |||||
Allstate Life Insurance Company | |||||
Contract No. GA-6317 | 1,764,754 | 1,668,956 | |||
Contract No. GA-77030 | -- | 1,035,458 | |||
Contract No. 77188 | -- | 12,487,441 | |||
Bank of America | |||||
Contract No. 99-064 | -- | 3,058,934 | |||
Bank of America | |||||
Contract No. 02-131 | 15,433,414 | 802,152 | |||
CDC Financial | |||||
Contract No. 1263-01 | 13,199,412 | -- | |||
GE Life & Annuity Assurance Co. | |||||
Contract No. GS-3558 | -- | 1,523,508 | |||
John Hancock Life Insurance Co. | |||||
Contract No. 14910GAC | -- | 2,006,949 |
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WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE 4 - INVESTMENTS (Continued)
December 31, | |||
2003 | 2002 | ||
Pooled assets (continued) | |||
John Hancock Life Insurance Co. | |||
Contract No. 9568 | 2,847,914 | 4,133,675 | |
JP Morgan Chase Bank | |||
Contract No. 401747-G | -- | 8,403,093 | |
JP Morgan Chase Bank | |||
Contract No. 401747-L | -- | 1,179,571 | |
JP Morgan Chase Bank | |||
Contract No. 401747-Z | 10,502,876 | -- | |
Monumental Life Insurance Company | |||
Contract No. SV04218Q | 1,091,289 | 1,043,098 | |
ING Life Insurance & Annuity Company | |||
Contract No. 14669 | 9,398,728 | 7,725,484 | |
Monumental Life Insurance Company | |||
Contract No. 00097TR | |||
Monoline Credit Card | - | 3,336,642 | |
Multifamily Balloon | - | 2,662,776 | |
Non-Agency Student Loan | - | 1,781,110 | |
US Agency Debenture | 3,851,604 | -- | |
Cash | 49,197 | 52,604 | |
State Street Bank & Trust | |||
Contract No. 98146 | |||
United States Treasury | -- | 3,444,987 | |
Citibank Credit Card Mortgage | -- | 2,128,568 | |
Prime Auto Trusts | -- | -- | |
Cash | -- | 11,881 |
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WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE 4 - INVESTMENTS (Continued)
December 31, | |||
2003 | 2002 | ||
Pooled assets (continued) | |||
State Street Bank & Trust | |||
Contract No. 103047 | 1,888,638 | -- | |
UBS AG | |||
Contract No. 5027 | |||
Agency Debenture | 3,936,576 | ||
Monoline Credit Card | 1,549,236 | ||
FHA/VA Reperforming Pas | 1,365,391 | ||
Cash | 59,979 | ||
UBS AG | |||
Contract No. 5174 | 4,690,806 | -- | |
Wrapper Contract | (304,815) | (1,503,195) | |
Mutual Funds: | |||
SSGA Equity Index Fund | 17,813,230 | 13,189,878 | |
Aggressive Equity Funds: | |||
SSGA U.S. Large Cap Growth Fund | 12,027,549 | 10,046,090 | |
MAS Small Cap Value Fund | 2,879,084 | 1,283,305 | |
Balanced Fund | 6,175,996 | 5,858,877 | |
International Funds | 1,428,388 | 647,718 | |
Value Fund | 1,311,223 | 568,030 | |
SSGA Bond Market Index Fund | 3,133,622 | 2,776,001 | |
Brokerage Stocks | 102,371 | 48,954 | |
Net assets of WPS Master Trust | $110,924,973 | $104,739,249 | |
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WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
NOTE 4 - INVESTMENTS (Continued)
Net investment income of the WestPoint Stevens Master Trust for the year ended December 31, 2003 is as follows:
Net investment income: | ||
Interest and dividend income | $ 3,364,156 | |
Net unrealized appreciation (depreciation) and | ||
realized gains (losses) on sales of investments: | ||
Company Stock Fund | (3,075,156) | |
SSGA Equity Index Fund | 3,806,787 | |
Aggressive Equity Funds: | ||
SSGA U.S. Large Cap Growth Fund | 2,694,464 | |
MAS Small Cap Value Fund | 670,505 | |
Brokerage Stocks | 32,221 | |
Balanced Fund | 809,043 | |
International Funds | 310,196 | |
Value Fund | 234,954 | |
Bond Market Index Fund | 118,973 | |
$ 8,966,143 | ||
NOTE 5 - GOING CONCERN
On June 1, 2003 the Plan's Sponsor filed for Chapter 11 bankruptcy in accordance with the U.S. Bankruptcy Code. The Plan had investments in the Sponsor's common stock, which had a value of approximately $3,048,500 at December 31, 2002. The Sponsor announced that under the terms of an agreement in principle with respect to its financial restructuring, all of the Sponsor's outstanding common stock will be cancelled. Subsequent to the filing of bankruptcy by the Plan's Sponsor, the Plan sold the common stock in the Sponsor for approximately $116,500, resulting in a loss of approximately $2,932,000.
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SUPPLEMENTAL SCHEDULE
WESTPOINT STEVENS INC.
RETIREMENT SAVINGS VALUE PLAN FOR EMPLOYEES
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2003
EMPLOYER IDENTIFICATION NUMBER: 36-3498354 | ||||
PLAN NUMBER: 016 | ||||
FORM: 5500 | ||||
(a) | (b) | (c) | (d) | (e) |
Identity of issue, borrower, | Description of investment including maturity date, |
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Participant Loans
Varying maturities and interest rates from 5.0% to 8.5%.
N/A
$ 2,416,434
$ 2,416,434
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EXHIBIT INDEX
Exhibit No. | Description | |
23 | ||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Management Pension Committee has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
RETIREMENT SAVINGS VALUE | ||||
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| PLAN FOR EMPLOYEES | ||
WESTPOINT STEVENS INC | ||||
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Date: June 29, 2004 | By: | /s/ John F. Sorte | ||
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| John F. Sorte | |
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| Chairman, Management | |
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| Pension Committee |