UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 30, 1995
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________________ to _________________
Commission file number 1-8016
TULTEX CORPORATION
(Exact name of registrant as specified in its charter)
Virginia 54-0367896
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
101 Commonwealth Boulevard, P. O. Box 5191, Martinsville, Virginia 24115
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 540-632-2961
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on which registered
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Common Stock, $1 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K [ ]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant:
$133,583,091 at March 15, 1996.
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(APPLICABLE TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
29,824,371 shares of Common Stock, $1 par value, as of March 15, 1996
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DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the
Part of the Form 10-K into which the document is incorporated:
1. Those portions of the Annual Report to Stockholders for the fiscal
year ended December 30, 1995 ("1995 Annual Report to Stockholders")
incorporated herein by reference in Part II, Items 5, 6, 7 and 8;
and Part IV, Item 14.
1. Those portions of the Proxy Statement for the company's 1996 Annual
Meeting of Stockholders ("1996 Proxy Statement") incorporated
herein by reference in Part III, Items 10, 11, 12 and 13.
PART I
Item 1. Business
General
Tultex Corporation is one of the world's largest marketers and manufacturers
of activewear and licensed sports apparel for consumers and sports enthusiasts.
The company's diverse product line includes fleeced sweats, jersey products
(outerwear T-shirts), and decorated jackets and caps. These products are sold
under the company's own brands led by the Discus Athletic and Logo Athletic
premium labels and under private labels, including Nike, Levi Strauss, Reebok
and Pro Spirit. In addition, the company has numerous professional and college
sports licenses to manufacture and market embroidered and screen-printed
products with team logos and designs under its Logo Athletic and Logo 7 brands.
The company is a licensee of professional sports apparel, holding licenses from
the National Football League ("NFL"), Major League Baseball ("MLB"), the
National Basketball Association ("NBA") and the National Hockey League ("NHL")
to manufacture a full range of sports apparel for adults and children.
Historically, Tultex has been a producer of quality fleece products for sale
to distributors and resale to consumers under private labels. However, in the
1980s, the activewear industry began to change. Increasing consumer demand
reflecting more active and casual lifestyles and the industry's historically
good long-term growth prospects and low fashion risk as compared to other
apparel products, attracted large, well-financed companies which acquired
competitors of the company. Simultaneously, larger mass merchandise retailers
began to exert pressure on margins for lower-priced fleece products.
In recent years, Tultex has initiated a strategy to enhance its competitiveness
and to capitalize on growth opportunities by becoming a consumer-oriented
apparel maker able to compete in a changing industry. This strategy includes
the following elements:
Increasing Emphasis on Higher-Margin Products. The company is strengthening
its competitiveness in the activewear business through the development of
branded and private label, higher-quality and higher-margin products to
supplement its traditionally strong position in the lower-priced segment of
the business. The company is developing its own brands, promoting Discus
Athletic for its premium products and using the Tultex label for the
value-oriented segment of the market. Discus Athletic's highly visible
advertising during televised broadcasts of college football and basketball on
the ESPN and ABC television networks and of Atlantic Coast Conference
basketball has contributed to significant annual increases in sales of this
brand since 1992. In addition, Tultex has partnering arrangements to supply
higher-quality, private label products to companies such as Reebok, Levi
Strauss and Nike, none of which accounted for more than 10% of the company's
consolidated sales during 1995. To complement its development of higher-margin
products, the company began manufacturing jersey products in 1991.
Expanding into Licensed Apparel Business to Complement Activewear Business.
Tultex's 1992 acquisitions of Logo 7, a marketer of licensed sports apparel,
and Universal, a marketer of sports licensed headwear, enabled the company to
achieve the fourth largest market share (12.0%) in the higher-margin licensed
apparel business in 1994, and have created opportunities for significant
manufacturing and distribution synergies with the company's activewear
business. The promotion of the Logo Athletic brand of licensed apparel
through television and print advertising, as well as promotional
arrangements featuring Superbowl quarter back Troy Aikman of the Dallas
Cowboys', San Francisco 49ers' quarterback Steve Young, Miami Dolphins'
quarterback Dan Marino, Denver Broncos' quarterback John Elway and the
Green Bay Packers' Reggie White, among others, has helped to increase the
visibility and sales of Logo Athletic products.
Increasing Distribution Channels and Strengthening Customer Relationships.
Tultex actively pursues strong relationships with department, sporting goods
and other specialty stores, such as Sears, JC Penney, Modell's, Dillard's,
Foot Locker, Champs and Sports Authority, to distribute its higher margin
branded and private label products. In addition, the company continues to
strengthen its relationships with high volume retailers such as Wal-Mart and
Target by supplying private label and Tultex products. Tultex provides
customers with exceptional service and support; as an example, its
distribution capabilities are highly responsive to customers' changing
delivery and inventory management requirements.
Investing in Modern Distribution and Production Facilities. During fiscal
1988 through fiscal 1995, Tultex invested approximately $208 million in
capital expenditures, primarily in the construction of its customer service
center and in high-efficiency spinning, knitting, dyeing, cutting and
embroidering machinery. In 1991, Tultex began operating the customer service
center, which the company believes is the most highly automated in the
industry. Having made significant investments in its distribution and
production facilities, the company's 1996 capital budget is set at $16 million.
The company's strategy has improved its sales mix. While net sales increased
3.5% in fiscal 1995 over 1994, net sales of Discus Athletic activewear
increased 29.9% to $75.8 million and net sales of Logo Athletic licensed
apparel increased 42.8% to $92.0 million. Sales of jersey products were $93.1
million for the fiscal year ended December 30, 1995, representing 24.0% of the
company's activewear sales during such period compared to 16.5% for fiscal
1994. Reduced consumer demand for licensed apparel due to the MLB strike and
NHL lockout, a slowdown at retail for activewear products in the fourth quarter
and higher raw material costs adversely affected Tultex's results of operations
during 1995.
The company's activewear business is vertically integrated, spinning
approximately 80% of the yarn it requires in three yarn plants located in
North Carolina (the balance is purchased under yarn supply contracts) and
knitting, dyeing and cutting fabric and sewing finished goods in 7 plants in
Virginia and North Carolina and one plant in Jamaica. The company's licensed
sports apparel operations are conducted from one plant in Indiana and one
plant in Massachusetts.
Industry
The Company produces activewear and licensed sports apparel and headwear for
sale at a broad range of price points through all major distribution channels.
Activewear
The company's activewear business consists of its fleecewear and jersey
products. All activewear industry and market share data included herein has
been estimated by the company based on data provided by Market Research
Corporation of America, a leading provider of market information on the
textile industry.
Fleecewear. The fleecewear industry, with retail sales of approximately $7.8
billion in 1995, has grown 1.7% in unit sales from 1990 to 1995. The
predominant fleecewear products are sweatshirts, pants and shorts.
Jersey (Outerwear T-shirts). Unit retail sales of jersey products have grown
7.5% from 1990 to 1995 and in 1995 totaled $7.0 billion, or 73 million dozens.
Like fleecewear, the industry characteristics of jersey apparel include low
fashion risk and long-term growth. Imports are a greater threat as the
weight/labor ratio and the freight costs involved are lower for jersey products
than for fleecewear; however, the ability to produce large volumes with short
delivery times gives domestic manufacturers an advantage over import
competition in both fleecewear and jersey apparel.
Licensed Apparel and Headwear
Estimated wholesale sales of professional sports licensed apparel (including
headwear) for 1994 were approximately $1.8 billion, according to Sports Style
Magazine, an industry publication. In general, the company believes that the
prospects for its continued growth in this market are good, although growth is
expected to be less rapid than in recent years due to increased competition.
The continually changing fortunes of existing teams, together with the
introduction of new franchises, has made the market extremely dynamic, as
interest in each team fluctuates with its performance. Manufacturers, such as
the company, with the capacity to respond quickly to these changes with new
products and designs, enjoy a competitive advantage over smaller competitors.
Company Products
Activewear
The principal activewear products of the company are fleeced knitwear items
such as sweatshirts, jogging suits, hooded jackets, headwear and jersey
apparel for work and casual wear. The company manufactures apparel products
principally under the Discus Athletic and Tultex brands. Products carrying the
Discus Athletic name are marketed for sale to chains such as Foot Locker,
department stores such as Sears and sporting goods stores, while Tultex
products are marketed for sale to mass merchandisers such as Wal-Mart and
wholesale clubs such as Sam's. The company is licensed to manufacture and
market adult fleecewear under the Britannia trademark owned by Levi Strauss &
Co. The company also manufactures private-label products for sale under many
labels, including Nike, Levi Strauss, Reebok and Pro Spirit.
Licensed Apparel and Headwear
The company's licensed apparel products include jackets, sweats, T-shirts,
baseball-style caps and other headwear, embroidered or imprinted with
professional and college sports and entertainment-related licensed designs and
logos. These products are marketed under the Logo Athletic and Logo 7 brands.
Under the Logo Athletic name, the company offers premium-quality jackets, caps
and other activewear, including NFL "Pro-Line" authentic sideline gear and NBA
"Authentics" apparel. Tultex, through Logo 7, acquired Pro-Line status from
the NFL in 1993, a flagship program entitling the company to sell products
identical to those worn on the sidelines by NFL players and coaches. Under the
terms of the non-exclusive four-year Pro-Line contract, the company markets
Pro-Line products at retail for all 30 NFL teams. Under the terms of the
non-exclusive three-year NBA Authentics contract, the company markets products
that are identical to those worn by NBA players, coaches and managers during
competition. The company's NFL Pro-Line and NBA Authentics products
prominently feature the Logo Athletic name and trademark, which the company
believes are key elements in developing the Logo Athletic brand. Under the
Logo 7 brand, the company offers moderately-priced outerwear, fleecewear,
T-shirts and caps with licensed designs and logos. The company also sells
popularly-priced licensed fleecewear, jersey apparel and headwear.
Customers; Marketing and Sales
Customers
The company offers a diverse product line for sale at a full range of price
points through all major distribution channels. The company has no customer
that constituted 10% of net sales in 1995. The company's top four customers
together accounted for approximately 27% of sales.
Marketing and Sales
The company has shifted its marketing strategy in recent years to focus on the
development of its own brands and sales through distribution channels that
support higher margins. In particular, the company has devoted significant
resources to the promotion of its Discus Athletic and Logo Athletic brands.
In 1993, the company began conducting advertising campaigns to promote its
Discus Athletic and Logo Athletic brands. The Discus Athletic advertising
campaign emphasizes quality and the usefulness of the product for many sports.
The company believes that this positioning effectively differentiates the
Discus Athletic line from competing specialized lines with powerful brand
associations. The Logo Athletic campaign focuses on establishing the
"authenticity" of Logo Athletic products. The company believes that licensed
apparel sales benefit substantially from the perception that products are the
same as those worn by professional sports stars.
Advertising expenditures were $17.1 million and $17.7 million in 1994 and 1995,
respectively, of which $14.7 million and $22.7 million, respectively, were
expensed in those years. In fiscal 1995, the company adopted the provisions of
the Accounting Standards Executive Committee's Statement of Position on
Reporting Advertising Costs ("Statement"). The Statement required that
certain advertising costs which were previously deferred and amortized over
an anticipated benefit period be recognized currently in the statement of
income. Advertising expenses reported as part of selling, general and
administrative expenses on the statement of income increased by approximately
$5.0 million in 1995 as a result of adopting this change in accounting method.
New product introductions are important to the company's licensed apparel
business and are undertaken to generate consumer excitement and demand.
Logo 7's creative design team, in cooperation with key customers and licensors,
continually develops and introduces new products and styles. The company is
able to react quickly to changing team fortunes, designing new products to
capitalize on shifts in popularity and delivering those products to the market
rapidly, sometimes in a matter of hours. During major professional and
collegiate sporting events, such as the Super Bowl, the company produces
on-site decorated products with championship logos of the winning teams for
immediate distribution and sale at the event.
The company's marketing methods for other products are typical of producers of
basic clothing products. Its merchandising department keeps abreast of current
fashionable styles and colors. After internal reviews by manufacturing
departments, selected customers preview and comment upon prototype garments
before the merchandising department determines those to be presented in sales
catalogs. Production is planned on orders received and anticipated customer
orders for these garments.
As of December 30, 1995, Tultex operated a sales office in each of New York,
Boston, Chicago and Atlanta and a Discus Athletic showroom in New York City.
These offices are the primary points of contact for customers and coordinate
sales, distribution of sales information, certain advertising, point-of-sale
displays and customer service. The company also employs eight independent
sales representatives to market its Discus Athletic line in the fragmented
sporting goods market. Logo 7's products are marketed through a sales force
of 50, including Logo 7 employees and independent sales representatives. In
1992, the company entered into an agreement with Nissan Trading Co., Ltd.,
a subsidiary of Nissan Motor Co., to market and sell the company's Discus
Athletic products in Japan. International sales in 1994 and 1995 were less
than 10%.
In November 1995, the company and four other investors completed the formation
of Wide Open Performance Wear, Inc. The company has minority ownership in
this joint venture which markets garments screenprinted with NASCAR graphics.
At December 30, 1995, Dominion Stores, Inc., a wholly-owned subsidiary,
operated 13 outlet stores in North Carolina, Virginia and West Virginia, which
sell surplus company apparel and apparel items of other manufacturers, and
operated 29 The Sweatshirt Company retail stores in 18 states, which primarily
sell first-quality company-made products and accessories. Dominion Stores'
total sales in fiscal 1995 were $16.0 million.
Licenses
Most of the company's licensed products are sold through Logo 7. The company
is a licensee of professional sports apparel, maintaining a full complement of
licenses with all of the major North American professional sports leagues
- -- the NFL, MLB, the NBA and the NHL -- and the Collegiate Licensing Company.
The company also holds licenses for the 1996 Summer Olympics in Atlanta and
NASCAR. These licenses require the payment of royalties generally ranging
from 9% to 16% of sales with guaranteed royalties of approximately $6 million
in fiscal 1996. The company's major licenses with the NFL, NBA and NHL expire
in 1997 and the MLB license expires in 1996. The company is licensed to
manufacture and market adult fleecewear under the Britannia(registered
trademark) trademark owned by Levi Strauss & Co.
The company's ability to compete is dependent on its ability to obtain and
renew licenses, particularly those from the major professional sports leagues.
The company enjoys long-standing relationships with its major league licensees,
having been awarded its first licenses with the NFL in 1971, with the NBA in
1977, with MLB in 1980 and with the NHL in 1988. The company has no reason to
believe that it will not be able to successfully renew these licenses. While
the company has enjoyed long, successful and uninterrupted licensing
relationships with its professional and collegiate athletic licensors, if a
significant license or licenses were not renewed or replaced, the company's
sales would likely be materially and adversely affected. In addition, the
company's material licenses are non-exclusive and new or existing competitors
may obtain similar licenses.
Manufacturing
The company's manufacturing process consists of yarn production; fabric
construction including knitting, dyeing and finishing operations; apparel
manufacturing including cutting and sewing operations; and, for garments with
logos, screenprint and embroidery operations. As a result of its modernization
efforts, the company believes that its manufacturing facilities are outfitted
with some of the most efficient and technologically-advanced equipment in the
industry.
During fiscal 1988 through fiscal 1995, the company invested approximately
$208 million to open new facilities, including sewing facilities in Roanoke,
Virginia and Montego Bay, Jamaica (a leased facility), and the highly
automated customer service center in Martinsville, Virginia, and to modernize
other facilities. Open-end spinning frames were acquired to increase yarn
production and reduce costs, higher color quality and lower dyeing costs were
achieved from the installation of new jet dyeing equipment, new dryers were
added in the fabric finishing process, automated cutting machines were
introduced, and new information systems were implemented.
Tultex's highly-automated customer service center, opened in 1991, has greatly
expanded the company's distribution capabilities. The customer service center
allows the company to package and ship its products according to the more
detailed color, size and quantity specifications typically required by
high-margin retailers and department stores and has permitted consolidation of
the company's warehouses.
In spring 1992, Logo 7 moved its operations to a newly-constructed, leased
facility built to Logo 7's specifications. This 650,000 square foot building
allowed Logo 7 to centralize operations, increase inventory control, improve
material flow and will allow for future expansion.
Tultex manufactures yarn at three facilities located in North Carolina, which
have a combined production capacity of 1.3 million pounds per week, utilizing
modern, open-end spinning frames. For its knitting operations, Tultex operates
approximately 500 modern high-speed, latch-needle circular knitting machines,
which produce various types of fabrics. The company believes its dyeing
operations are among the most modern and technologically efficient in the
industry; dyeing operations are computer-controlled, allowing precise
duplication of dyeing procedures to ensure "shade repeatability" and
color-fast properties. The finishing operations employ mechanical squeezing
and steaming equipment.
The Martinsville cutting facility uses advanced Bierrebi automatic continuous
cutting machines with computer-controlled hydraulic die-cutting heads and
"lay-up" machines and high-speed reciprocating knives. Sewing production at
the company's eight sewing facilities is organized on an assembly-line basis.
The company decorates its unfinished licensed apparel products using
screenprinting or embroidery at Logo 7's facilities in Indianapolis and
Universal's facilities in Massachusetts. Automatic silk-screen machines and
dryers are used for longer runs, and hand-operated presses are used for
shorter or more complicated runs. Embroidery is applied using high-speed,
computerized stitching equipment.
In September 1995, the company entered into a five-year production agreement
with Overseas Manufacturing Systems of America, Inc. ("OMSA"), a Mexican joint
venture, to produce jersey products. The company provided three spinning
machines to OMSA for use in its yarn making operations and OMSA agreed to
manufacture up to 24,000 dozens of jersey product per year for delivery to the
company or its U.S. based customers.
The company's order backlog at December 31, 1994 was approximately $143
million and at December 30, 1995 was approximately $184 million. Backlogs are
computed from orders on hand at the last day of each fiscal period. The
company believes that due to the seasonality of the company's business and the
just-in-time nature of much of the company's sales, order backlogs are not a
reliable indicator of future sales volume.
Raw Materials
The company's principal raw materials for the production of activewear are
cotton and polyester. Cotton content in fleecewear typically is 50% and in
jersey apparel typically is 100%. The company is producing increasing amounts
of fleecewear containing 90-100% cotton. Fleecewear and jersey manufacturers
are extremely sensitive to fluctuations in cotton and polyester prices as
these materials represent approximately 30% of the manufacturing cost of the
product. In addition, the company is indirectly impacted by increasing costs
of raw materials in its licensed apparel business because the company
purchases finished goods containing cotton and polyester and these higher raw
materials costs often are effectively passed on to the company. Cotton prices
increased significantly in 1995 over 1994 levels. In 1995, the company's
average price per pound of cotton was $0.85, compared with $0.72 in 1994,
while the average price per pound of polyester was $0.80 in 1995, compared
with $0.64 in 1994. The company expects the average price paid for fiber in
1996 to be relatively unchanged from the average price for the prior year
As of March 12, 1996, the company has fixed the price on approximately 50% of
its planned cotton purchases for fiscal 1996. To the extent cotton prices
increase before the company fixes the price for the remainder of its raw cotton
needs, the company's results of operations could be adversely affected.
Trademarks
The company increasingly promotes and relies upon its trademarks, including
Discus Athletic, Logo Athletic, Tultex, and Logo 7, which are registered in
the United States and many foreign countries.
Seasonality
The company's business is seasonal. The majority of fleecewear sales and
related net income occur in the third and fourth quarters, coinciding with
cooler weather and the playing seasons of popular professional and college
sports. Jersey sales peak in the second and third quarters of the year,
somewhat offsetting the seasonality of fleecewear sales.
Environmental Matters
The company is subject to various federal, state and local environmental laws
and regulations governing, among other things, the discharge, storage,
handling and disposal of a variety of substances and wastes used in or
resulting from its operations, including, but not limited to, the Water
Pollution Control Act, as amended; the Clean Air Act, as amended; the Resource
Conservation and Recovery Act, as amended; the Toxic Substances Control Act,
as amended; and the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
The company returns dyeing wastes for treatment to the City of Martinsville,
Virginia's municipal wastewater treatment systems operated pursuant to a
permit issued by the state. The city has filed a timely application to renew
its permit. In 1989, the city adopted a plan for removing the coloration,
caused by the dye wastes, from the water by using polymer chemicals to combine
with the extremely small particles of the dye to create a sludge-like
substance that can be retrieved from the water at the city's wastewater
treatment plant and disposed of as a non-hazardous waste in the city's
landfill. To cover the cost to the city, the company pays 50 to 80 cents per
thousand gallons of water above regular water costs. The expenditures required
do not have a material effect on the company's earnings or competitive
position.
The company's operations also are governed by laws and regulations relating to
employee safety and health, principally the Occupational Safety and Health Act
and regulations thereunder, which, among other things, establish exposure
limitations for cotton dust, formaldehyde, asbestos and noise, and regulate
chemical and ergonomic hazards in the workplace.
The company believes that it is in material compliance with the aforementioned
laws and regulations and does not expect that future compliance and actions
responding to routine inspections will have a material adverse effect on its
capital expenditures, earnings or competitive position in the foreseeable
future. However, there can be no assurances that environmental and other legal
requirements will not become more stringent in the future or that the company
will not incur significant costs in the future to comply with such requirements.
Employees
The company had approximately 6,835 employees at December 30, 1995, of which
5,990 or 88% were paid hourly.
In August 1994, hourly employees at the company's Martinsville, Virginia
facilities voted for representation by the Amalgamated Clothing and Textile
Workers Union (now known as the Union of Needletrades, Industrial and Textile
Employees or UNITE). The company accepted a three-year labor contract with the
union which covers all hourly employees at the Martinsville facilities. It was
ratified by an employee vote in March 1995. The contract covers approximately
2,100 hourly employees in the Martinsville area. In May 1995, hourly
employees at the company's South Boston, Virginia sewing facility voted for
representation by UNITE. A three-year contract was ratified by an employee
vote in August 1995. The contract covers approximately 550 employees in the
South Boston area. Employees represented by UNITE accounted for approximately
39% of the company's total employees and approximately 44% of the company's
hourly employees. None of the company's other employees are represented by a
union.
Item 2. Properties
Most of the company's principal physical facilities (other than those of Logo
7 and Universal) are located in Virginia and North Carolina, within a
150 - mile radius of the City of Martinsville. All facilities are of masonry
construction except the buildings at Vinton, Virginia, Mattapoisett,
Massachusetts and the Customer Service Center in Martinsville, Virginia, which
are steel-framed metal-walled buildings constructed on a concrete slab. All
buildings are well-maintained. The location, approximate size and use of the
company's principal owned properties are summarized in the following table:
Square
Location Footage Use
- ---------------- ------- ----------------------------------------
Martinsville, VA 45,200 Administrative offices
Martinsville, VA 1,100,000 Administrative offices, manufacturing
and distribution (apparel)
Koehler, VA 60,000 Warehousing
Martinsville, VA 70,000 Warehousing
South Boston, VA 130,000 Sewing (apparel)
Bastian, VA 53,500 Sewing (apparel)
Longhurst, NC 287,000 Manufacturing (yarn)
Roxboro, NC 110,000 Manufacturing (yarn)
Dobson, NC 38,000 Sewing (apparel)
Mayodan, NC 612,000 Manufacturing, warehousing
and shipping (yarn and apparel)
Vinton, VA 50,000 Sewing (apparel)
Martinsville, VA 502,200 Warehousing and shipping (apparel)
Mattapoisett, MA 116,250 Distribution (headwear)
The following table presents certain information relating to the company's
principal leased facilities:
Lease
Expira- Current
Square tion Annual
Location Footage Date Rental Use
- --------------- ------- -------- ---------- ---------------------
Chilhowie, VA 40,015 08/31/97 $ 46,200 Sewing (apparel)
Montego Bay, 66,510 12/31/96 266,040 Sewing (apparel)
Jamaica
Martinsville, VA 17,600 01/15/02 60,095 Warehousing (apparel)
Martinsville, VA 30,000 Monthly 43,200 Warehousing (apparel)
Lease
Expira- Current
Square tion Annual
Location Footage Date Rental Use
- --------------- ------- -------- ---------- ---------------------
Martinsville, VA 300,000 06/01/98 684,000 Warehousing (apparel)
Martinsville, VA 300,000 06/01/98 978,000 Warehousing (apparel)
Indianapolis, IN 650,000 04/30/07 1,404,000 Manufacturing (apparel)
Manufacturing equipment, substantially all of which is owned by the company,
includes carding, spinning and knitting machines, jet-dye machinery, dryers,
cloth finishing machines, cutting and sewing equipment and automated
storage/retrieval equipment. This machinery is modern and kept in good repair.
The company leases a fleet of trucks and tractor-trailers which are used for
transportation of raw materials and for interplant transportation of
semi-finished and finished products.
The company's facilities and its manufacturing equipment are considered
adequate for its needs.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for Registrant's Common Stock and Related Stockholder Matters.
As of February 29, 1996 there were 2,897 record holders of the Company's
common stock. Other information required by Item 5 of Form 10-K appears under
the heading "Common Stock Prices and Dividend Information" on page 24 and in
"Note 6" of "Notes to Financial Statements" on page 15 of the company's 1995
Annual Report to Stockholders.
Item 6. Selected Financial Data.
The information required by Item 7 of Form 10-K appears on pages 34 and 35 of
company's 1995 Annual Report to Stockholders and is incorporated by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The information required by Item 7 of Form 10-K appears on pages 29 through 33
of the company's 1995 Annual Report to Stockholders and is incorporated herein
by reference.
Item 8. Financial Statements and Supplementary Data.
The consolidated financial statements, together with the report thereon of
Price Waterhouse LLP, dated February 6, 1996, appearing on pages 7 through 28
of the company's 1995 Annual Report to Stockholders are incorporated by
reference in this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
With respect to the directors of the company, the information required by
Item 10 of Form 10-K appears on pages 3 through 5 of the company's 1996 Proxy
Statement and is incorporated herein by reference.
Pursuant to General Instruction G to Form 10-K, the following information is
furnished concerning the executive officers of the company.
Executive Officers of the Company
Name Office Age
- ---------------------- -------------------------------------------- ---
John M. Franck Chairman of the Board 43
Charles W. Davies, Jr. President and Chief Executive Officer 47
O. Randolph Rollins Executive Vice President and General Counsel 53
Walter J. Caruba Vice President - Sales and Marketing 48
W. Jack Gardner, Jr. Vice President - Operations 52
B. Alvin Ratliff Vice President - Sourcing, Contracting and
Strategic Planning 50
Don P. Shook Vice President - Administration 58
John J. Smith Vice President - Customer Services 53
Suzanne H. Wood Vice President and Chief Financial Officer 36
Kevin W. Walsh Treasurer 41
Kathy H. Rogers Secretary 37
John M. Franck, Chairman of the Board of Directors, was Chairman of the Board
of Directors and Chief Executive Officer from January 1991 to January 1995,
and served as President and Chief Operating Officer from November 1988 to
January 1991. Mr. Franck is a director of Piedmont Trust Bank, Martinsville,
Virginia.
Charles W. Davies, Jr., Chief Executive Officer of the Company since January
1995, was President and Chief Operating Officer from January 1991 to January
1995, and Executive Vice President from December 1989 to January 1991. From
February 1988 through November 1989, he was President and Chief Executive
Officer of Signal Apparel Company in Chattanooga, Tennessee. From March 1986
to February 1988, Mr. Davies was President of Little Cotton Manufacturing
Company in Wadesboro, North Carolina, and from December 1984 through February
1986 was Senior Vice President of Fieldcrest-Cannon in Kannapolis, North
Carolina.
O. Randolph Rollins became Executive Vice President and General Counsel in
October 1994. Prior thereto, Mr. Rollins was a partner with the law firm of
McGuire, Woods, Battle & Boothe, Richmond, Virginia, from 1973 to 1990 and
from January 1994 to October 1994. From 1990 to January 1994, Mr. Rollins
served in the Cabinet of Virginia's Governor L. Douglas Wilder, first as
Deputy Secretary of Public Safety and from 1992 through January 14, 1994 as
Secretary of Public Safety of the Commonwealth of Virginia. Mr. Rollins is
the brother-in-law of John M. Franck.
Walter J. Caruba became Vice President - Sales and Marketing in September 1992.
He served as Vice President - Distribution between October 1990 and September
1992. He served as General Manager - Planning from November 1989 to October
1990 and was Director - Production Control from December 1985 to November 1989.
W. Jack Gardner, Jr. became Vice President - Operations in September 1994 and
served as General Manager - Fabric Manufacturing from January 1988 until that
time.
B. Alvin Ratliff became Vice President - Sourcing, Contracting and Strategic
Planning in March 1995. He previously served as Vice President and
Service/Quality Coordinator from February 1994 until March 1995 after serving
as Vice President - Operations from December 1984 until that time.
Don P. Shook became Vice President - Administration in January 1995 after
serving as Vice President - Human and Financial Resources since January 1994.
He previously served as Vice President - Finance and Administration from
December 1988 until January 1994. Prior thereto, he served as Vice President
- - Finance from January 1987 to November 1988 and was Controller from December
1985 and January 1987.
John J. Smith became Vice President - Customer Services in September 1992.
Prior thereto, he served as Vice President - Sales and Marketing since December
1987 after serving as Director - Corporate Planning since May 1987. He was
Manager - Information Systems & Services between December 1985 and May 1987.
Suzanne H. Wood became Vice President and Chief Financial Officer in February
1996. She previously served as Controller of the company from October 1993
after joining the Company in June 1993. Prior to joining the company, she
was employed by Price Waterhouse LLP, most recently as Audit Senior Manager.
Kevin W. Walsh was appointed Treasurer in December 1994. In the six years
prior to joining the company, he was a vice president and senior loan officer
of Signet Bank.
Kathy H. Rogers became Secretary in January 1996. She also continues as
Director - Corporate Communications, a position she has held since September
1992. She was Manager - Employee Communications between May 1989 and
September 1992.
All terms of office will expire concurrently with the meeting of directors
following the next annual meeting of stockholders at which the directors are
elected.
Item 11. Executive Compensation.
The information required by Item 11 of Form 10-K appears on pages 6
(beginning with "Executive Compensation") through 9 of the company's 1996
Proxy Statement and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by Item 12 of Form 10-K appears on page 1 and 2 of
the company's 1996 Proxy Statement and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
The information required by Item 13 of Form 10-K appears on page 11 of the
company's 1996 Proxy Statement and is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
(1) Financial Statements: Page in Annual Report
Report of Independent Accountants 28
Balance Sheet at December 30, 1995 and
December 31, 1994 7
Statement of Income for each of the three
years in the peroid ended Decembe 30, 1995 8
Statement of Changes in Stockholders' Equity
for each of the three years in the period
ended December 30, 1995 9
Statement of Cash Flows for each of the
three years in the period ended
December 30, 1995 10
Notes to Financial Statements 11 - 27
(2) Financial Statement Schedule: Page in Form 10-K
Report of Independent Accountants on
Financial Statement Schedule: F-1
Consolidated Financial Statement Schedule
for each of the three years in the period
ended December 30, 1995:
II-Valuation and Qualifying Accounts and
Reserves F-2
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
(3) Exhibits
3.1 Restated Articles of Incorporation (filed as Exhibit 3.1 to
the company's Form 10-K for the year ended December 29, 1990
and incorporated herein by reference)
3.2 Articles of Amendment to the Restated Articles of
Incorporation (filed as Exhibit 3 to the company's 8-K dated
January 31, 1992 and incorporated herein by reference)
3.3 By-laws of Tultex Corporation (filed as Exhibit 3.3 to the
company's Amendment No. 1 to Form S-1 dated March 17, 1995
and incorporated herein by reference)
3.4 Articles of Incorporation of AKOM Ltd. (filed as Exhibit 3.4
to the company's Amendment No. 1 to Form S-1 dated March 17,
1995 and incorporated herein by reference)
3.5 By-laws of AKOM, Ltd. (filed as Exhibit 3.5 to the company's
Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
3.6 Articles of Incorporation of Dominion Stores, Inc. (filed as
Exhibit 3.6 to the company's Amendment No. 1 to Form S-1 dated
March 17, 1995 and incorporated herein by reference)
3.7 By-laws of Dominion Stores, Inc. (filed as Exhibit 3.7 to the
company's Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
3.8 Articles of Incorporation of Tultex International, Inc. (filed
as Exhibit 3.8 to the company's Amendment No. 1 to Form S-1
dated March 17, 1995 and incorporated herein by reference)
3.9 By-laws of Tultex International, Inc. (filed as Exhibit 3.9 to
the company's Amendment No. 1 to Form S-1 dated March 17, 1995
and incorporated herein by reference)
3.10 Articles of Incorporation of Logo 7, Inc. (filed as Exhibit
3.10 to the company's Amendment No. 1 to Form S-1 dated
March 17, 1995 and incorporated herein by reference)
3.11 By-laws of Logo 7, Inc. (filed as Exhibit 3.11 to the company's
Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
3.12 Articles of Incorporation of Universal Industries, Inc. (filed
as Exhibit 3.12 to the company's Amendment No. 1 to Form S-1
dated March 17, 1995 and incorporated herein by reference)
3.13 By-laws of Universal Industries, Inc. (filed as Exhibit 3.13 to
the company's Amendment No. 1 to Form S-1 dated March 17, 1995
and incorporated herein by reference)
3.14 Articles of Incorporation of Tultex Canada, Inc. (filed as
Exhibit 3.14 to the company's Amendment No. 1 to Form S-1 dated
March 17, 1995 and incorporated herein by reference)
3.15 By-laws of Tultex Canada, Inc. (filed as Exhibit 3.15 to the
company's Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
3.16 Articles of Incorporation of SweatJet, Inc. (filed as Exhibit
3.16 to the company's Amendment No. 1 to Form S-1 dated
March 17, 1995 and incorporated herein by reference)
3.17 By-laws of SweatJet, Inc. (filed as Exhibit 3.17 to the
company's Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
4.1 Indenture among Tultex Corporation, the Guarantors and First
Union National Bank of Virginia, as Trustee, relating to the
Senior Notes dated March 23, 1995 (filed as Exhibit 4.1 to the
company's Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
4.2 Senior Note (included in Exhibit 4.1 as filed with the company's
Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
4.3 Subsidiary Guarantee (included in Exhibit 4.1 as filed with the
company's Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
10.1 Tultex Corporation 1987 Stock Option Plan (filed as Exhibit B to
the company's Definitive Proxy Statement dated and mailed
January 15, 1988 and incorporated herein by reference)
10.2 Tultex Corporation 1990 Stock Option Plan (filed as Exhibit A
to the company's Definitive Proxy Statement dated and mailed
February 14, 1991 and incorporated herein by reference)
10.3 Supplemental Retirement Plan (filed as an exhibit to the
company's Form 10-K for the fiscal year ended December 30, 1990
and incorporated herein by reference)
10.4 Tultex Corporation Salaried Employees' Common Stock Purchase
Plan, dated February 11, 1994 (filed as Exhibit 4.5 to the
company's Registration Statement Form S-8 dated February 11,
1994 and incorporated herein by reference)
10.5 Form of Employment Continuity Agreement (filed as exhibits to
the company's Form 10-Q for the quarter ended April 1, 1989 and
the company's Form 10-Q for the quarter ended March 31, 1990 and
incorporated herein by reference)
10.6 Standstill Agreement, dated as of January 31, 1992, among Tultex
Corporation, Logo 7, Inc. (Ind.), Melvin Simon and Herbert
Simon (filed as Exhibit 10(b) to the company's Form 8-K dated
January 31, 1992 and incorporated herein by reference)
10.7 Credit Agreement for $225 million credit facility, dated
March 23, 1995 (filed as Exhibit 10.7 to the company's Form
10-K for the year ended December 30, 1995 and incorporated
herein by reference)
11 The computation of earnings per share can be clearly determined
from the financial statements of the Company contained in the
Annual Report to Stockholders
13 Annual Report to Stockholders
21 Subsidiaries of the company (filed herewith)
23 Consent of Price Waterhouse LLP (filed herewith)
(b) Reports of Form 8-K
No reports on Form 8-K were filed for the quarter ended
December 30, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Tultex Corporation
(Registrant)
/s/ Charles W. Davies, Jr.
----------------------------------------------
By: Charles W. Davies, Jr., President and CEO
Date: March 29, 1996
--------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
March 29, 1996 /s/ Charles W. Davies, Jr.
----------------------------------------
Charles W. Davies, Jr., President, CEO &
Director (Principal Executive Officer)
March 29, 1996 /s/ Suzanne H. Wood
-----------------------------------------
Suzanne H. Wood, Vice President and Chief
Financial Officer (Principal Financial
Officer)
March 29, 1996 /s/ John M. Franck
-----------------------------------
John M. Franck, Director (Chairman)
March 29, 1996 /s/ Irving M. Groves, Jr.
------------------------------
Irving M. Groves, Jr. Director
March 29, 1996 /s/ Lathan M. Ewers, Jr.
------------------------------
Lathan M. Ewers, Jr., Director
March 29, 1996 /s/ H. Richard Hunnicutt, Jr.
-----------------------------------
H. Richard Hunnicutt, Jr., Director
March 29, 1996 /s/ F. Kenneth Iverson
----------------------------
F. Kenneth Iverson, Director
March 29, 1996 /s/ Bruce M. Jacobson
---------------------------
Bruce M. Jacobson, Director
March 29, 1996 /s/ Richard M. Simmons, Jr.
---------------------------------
Richard M. Simmons, Jr., Director
EXHIBITS
ANNUAL REPORT ON FORM 10-K
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 30, 1995
TULTEX CORPORATION
COMMISSION FILE NUMBER 1-8016
Exhibit Index
13 Annual Report to Stockholders
21 Subsidiaries of the Company
23 Consent of Price Waterhouse
27 Financial Data Schedule
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of
Tultex Corporation
Our audits of the consolidated financial statements referred to in our
report dated February 6, 1996 appearing on page 20 of the 1995 Annual
Report to Stockholders of Tultex Corporation, (which report and consolidated
financial statements are incorporated by reference in this Annual Report on
Form 10-K), also included an audit of the Financial Statement Schedule listed
in the accompanying index of this Form 10-K. In our opinion, this Financial
Statement Schedule presents fairly, in all material respects, the information
set forth therein when read in conjunction with the related consolidated
financial statements.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Winston-Salem, North Carolina
February 6, 1996
TULTEX CORPORATION SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS CONSOLIDATED
(In thousands of dollars)
Balance at Additions Balance
Reserve for doubtful beginning charged to at end
accounts of period operations Reductions of period
- ----------------------- ---------- ---------- ---------- ---------
For the fifty-two weeks
ended January 1, 1994 $ 2,360 $ 3,241 $ (3,227) (1) $ 2,374
========== ========== ========== =========
For the fifty-two weeks
ended December 31, 1994 $ 2,374 $ 3,935 $ (4,194) (1) $ 2,115
========== ========== ========== =========
For the fifty-two weeks
ended December 30, 1995 $ 2,115 $ 7,061 $ (4,949) (1) $ 4,227
========== ========== ========== =========
(1) Amounts represent write-off of uncollectible receivable balances.
F-2