SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 29, 1996
Commission File No. 1-11126
DYERSBURG CORPORATION
(Exact name of registrant as specified in its charter)
TENNESSEE 62-1363247
(State or other jurisdiction of (I.R.S employer
incorporation or organization identification no.)
1315 Phillips St., Dyersburg, Tennessee 38024
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (901) 285-2323
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 [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Title of each class Number of Shares Outstanding
as of August 2, 1996
Common Stock, $.01 par value 13,229,508
INDEX TO FORM 10-Q
DYERSBURG CORPORATION
PART I--FINANCIAL INFORMATION
PAGE NUMBER
ITEM 1--FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Condensed Balance Sheets at
June 29, 1996, September 30, 1995 and
July 1, 1995............................. 3
Consolidated Condensed Statements of Income
for the Three Months Ended June 29, 1996
and July 1, 1995; Nine Months Ended
June 29, 1996 and July 1, 1995.......... 4
Consolidated Condensed Statements of Cash
Flows for the Nine Months Ended
June 29, 1996 and July 1,
1995...................................... 5
Notes to Consolidated Condensed Financial
Statements................................ 6
ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.................................. 7
PART II--OTHER INFORMATION
ITEM 6--EXHIBITS AND REPORTS ON FORM 8-K............... 10
SIGNATURES............................................. 11
CONSOLIDATED CONDENSED BALANCE SHEET
DYERSBURG CORPORATION
(in thousands)
June 29 September 30 July 1,
1996 1995 1995
(Unaudited) (Note A) (Unaudited)
ASSETS
Current assets:
Cash $ 805 $ 974 $ 654
Accounts receivable net 47,778 36,920 41,337
Inventories 30,340 22,238 28,623
Prepaid expenses and other 1,125 1,286 882
Total current assets 80,048 61,418 71,496
Intangibles 60,048 61,620 62,191
Property, plant and
equipment, net 69,098 65,834 67,542
$209,194 $188,872 $201,229
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 10,669 $10,515 $ 9,557
Accrued expenses 6,553 5,676 6,595
Income taxes 1,906 851
Total current liabilities 19,128 16,191 17,003
Deferred income taxes
and other 8,824 8,777 9,157
Long-term debt 93,339 77,646 89,890
Stockholders' Equity:
Common stock 137 142 142
Additional paid-in capital 44,279 46,821 46,821
Retained earnings 43,487 39,295 38,216
87,903 86,258 85,179
$209,194 $188,872 $201,229
<FN>
See notes to consolidated condensed financial statements
</FN>
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
DYERSBURG CORPORATION
(in thousands except share data)
Three Months Ended Nine Months Ended
June 29, July 1, June 29, July 1,
1996 1995 1996 1995
Net sales $ 64,142 $ 57,022 $136,574 $146,071
Cost and expenses:
Cost of sales 49,504 44,640 108,290 117,088
Selling, general and
administrative 6,309 4,851 15,811 14,538
Interest and amortization
of debt costs 1,676 1,681 4,590 4,618
57,489 51,172 128,691 136,244
Income before income taxes 6,653 5,850 7,883 9,827
Income taxes 2,772 2,785 3,278 4,488
Net income $ 3,881 $ 3,065 $ 4,605 $ 5,339
Share data:
Weighted average common
and common equivalent
shares outstanding 13,660,755 14,196,228 13,904,896 14,196,228
Earnings per primary
and fully diluted
common share and
common equivalent share:
Net income $ 0.28 $ 0.22 $ 0.33 $ 0.38
Dividends per share $ 0.01 $ 0.01 $ 0.03 $ 0.03
<FN>
See notes to consolidated condensed financial statements
</FN>
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
DYERSBURG CORPORATION
(in thousands)
Nine Months Ended
June 29, July 1,
1996 1995
Cash Flows from Operating Activities
Net Income $ 4,605 $ 5,339
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization 8,773 8,860
Deferred income taxes 47 324
Accounts receivable -10,857 1,542
Inventories - 8,102 -7,986
Other-net 3,185 - 862
Net cash provided by
operating activities -2,349 7,217
Cash Flows from Investing Activities
Capital expenditures -10,777 -9,334
Other - net 225 23
Net cash used in investing activities -10,552 -9,311
Cash Flows from Financing Activities
Retirement of debt - 151 - 147
Net borrowing under revolving
credit agreement 15,843 2,761
Dividends paid - 413 - 426
Issuance of common stock 43
Retirement of common stock - 2,590
Net cash provided by financing
activities 12,732 2,188
Net decrease in cash - 169 94
Cash at beginning of period 974 560
Cash at end of period 805 654
<FN>
See notes to consolidated condensed financial statements.
</FN>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
DYERSBURG CORPORATION
June 29, 1996
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated condensed
financial statements include the accounts of Dyersburg Corporation
("Dyersburg") and its wholly-owned subsidiary. All significant
intercompany balances and transactions have been eliminated. The
accompanying unaudited consolidated condensed 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 Article 10 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. Financial information as of
September 30, 1995 has been derived from the audited financial
statements of the Corporation, but does not include all disclosures
required by generally accepted accounting principles. In the
opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the
financial information for the periods indicated have been included.
The results for interim periods are not necessarily indicative of
results to be expected for the year. For further information,
refer to the consolidated financial statements and footnotes
thereto included in the Company's annual report on Form 10-K for
the fiscal year ended September 30, 1995.
NOTE B--INVENTORIES
(In Thousands)
June 29, September 30, July 1,
1996 1995 1995
Raw Materials $ 7,482 $ 4,947 $ 6,749
Work in Process 7,643 7,621 9,460
Finished Goods 14,330 8,937 11,648
Supplies and other 885 733 766
$30,340 $22,238 $ 28,623
NOTE C--STOCK REPURCHASE
On October 4, 1995, the Company approved a plan to
repurchase up to 2,000,000 shares of Dyersburg Corporation common
stock. The repurchase is expected to occur over a period of
approximately 12-18 months and will be made at the discretion of
the Company as warranted based upon market pricing. As of June 29,
1996, a total of 539,775 shares had been purchased under the
NOTE C--STOCK REPURCHASE - Continued
repurchase plan at an aggregate cost of $2,589,500, or $4.80 per
share, on average.
NOTE D--TAXES
The Company's effective tax rate for the nine months
ended June 29, 1996 was 41.6% as compared to 45.7% for the comparable
1995 fiscal period. The reduction in the effective rate is the result
of certain state tax savings.
ITEM 2--MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Net sales for the quarter ended June 29, 1996 were $64.1
million versus $57.0 million for the quarter ended July 1, 1995.
The 12.5% increase resulted from improvement in consumer demand for
apparel products and from the effects of slightly improved product
pricing in 1996. Net sales for the nine month period declined 6.5%
from $146.1 million to $136.6 million, primarily due to weak
consumer demand in the first six months of 1996 and increased sales
in the fiscal 1995 period resulting from one-time off-season sales
incentives. The decrease was partially offset by slightly improved
pricing in the fiscal 1996 period.
Gross margins for the quarter increased to 22.8% from
last year's 21.7%. The increase was primarily due to an improved
mix of higher-margin products combined with slightly improved
pricing. Gross margins for the fiscal 1996 nine month period were
20.7% compared to 19.8% for the same period in 1995. Raw material
costs, which escalated significantly during fiscal 1995, have
largely stabilized or slightly declined following modest increases
early in fiscal 1996.
Selling, general and administrative expenses as a
percentage of sales were 9.8% for the third fiscal quarter of 1996
versus 8.5% for the same period in 1995. For the nine months ended
June 29, 1996, these expenses were 11.6% versus 10.0% for the prior
year. Selling, general and administrative expenses increased due to
expansion in the marketing organization and to nonrecurring costs
associated with the internal reorganization of the Company's
subsidiaries.
Interest expenses for the quarter and nine month period
in 1996 approximated those of the same periods in the prior year.
The Company's effective tax rate for the nine months ended
June 29, 1996 was 41.6% as compared to 45.7% for the comparable
1995 fiscal period. The reduction in the effective rate is the
result of certain state tax savings.
Net income for the third fiscal quarter of 1996
increased to $3.9 million, or $.28 per share, versus 1995's $3.1
million, or $.22 per share. For the fiscal 1996 nine month period,
net income was $4.6 million, or $.33 per share, versus $5.3
million, or $.38 per share, in the prior year.
Liquidity and Capital Resources
Working capital at June 29, 1996 was $60.9 million
versus $54.5 million at July 1, 1995 due primarily to an increase
Liquidity and Capital Resources - Continued
in accounts receivable as a result of higher sales in the 1996 to
quarter. The Company's current ratio was 4.2 to 1 and total debt-
to-capital was 51.5% at June 29, 1996. Long-term debt increased
$93.3 million at June 29, 1996 from $77.6 million at September 30,
1995 as a result of seasonal working capital requirements and the
Company's stock repurchase program. Long-term debt at June 29,
1996 slightly exceeded the amount at July 1, 1995.
Receivables increased from $36.9 million at September
30, 1995 to $47.8 million at June 29, 1996 as a result of
seasonally higher sales activity. Inventories increased from $22.2
million at September 30, 1995 to $30.3 million at June 29, 1996.
Maximum inventory levels were reached early in the third quarter of
1996 with a continued decrease expected through year-end.
Capital expenditures continued as planned with spending
of $2.0 million in the third fiscal quarter of 1996 compared to
$3.2 million for the same period in 1995. The Company anticipates
that capital expenditures in fiscal 1996 will approximate those of
1995.
The Company repurchased 4,200 shares of its common stock
at a total cost of $22,200 during the quarter ended June 29, 1996.
A total of 539,775 shares were purchased during the first nine
months of fiscal 1996 at an aggregate cost of $2,589,500, or an
average of $4.80 per share.
Working capital requirements peaked during the third
quarter along with seasonal production volume. At June 29, 1996,
the Company had unused available bank lines of credit of $12.3
million. The Company believes that cash generated from operations
and available borrowing under the revolving credit facility will be
sufficient to meet operating needs and fund the capital spending
and stock repurchase programs.
PART II--OTHER INFORMATION
ITEM 6--EXHIBITS AND REPORTS ON FORM 8-K
(a) See "Index to Exhibits" on page .
(b) There were no reports filed on Form 8-K
during the quarter ended June 29, 1996.
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.
Paul L. Hallock
Date Paul L. Hallock
Vice President - Finance
INDEX
Exhibit No. Description Page No.
10.1 Second Amended and 13
Restated Reducing Revolving
Credit Agreement
10.2 First Amendment to Second 118
Amended and Restated Reducing
Revolving Credit Agreement
11 Computation of Earnings 127
Per Share