FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of Earliest Event Reported): September 9, 2002
BONTEX, INC.
(Exact name of Registrant as specified in its charter)
Virginia 0-5200 54-0571303
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
ONE BONTEX DRIVE,
BUENA VISTA, VIRGINIA 24416-1500
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 540-261-2181
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(Former name or former address, if changed since last report)
Item 5. Other Events.
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Bontex, Inc. ( the "Company") has a secured term loan and credit facility (the
"Debt") with Congress Financial Corporation ("Congress"). As previously reported
by the Company in Form 8-Ks filed on December 21, 2001, January 22, 2002, April
22, 2002, June 18, 2002, August 7, 2002 and August 20, 2002, and its Form 10-Q
filed on May 15, 2002, Congress does not intend to renew the Debt. Since January
26, 2002, Congress and the Company have entered into various agreements (the
"Interim Agreements") extending the scheduled maturity date of the Debt to
September 9, 2002. Effective September 9, 2002, Congress agreed to extend the
scheduled maturity date of the Debt from September 9, 2002, to July 1, 2003
under the terms of a Fifth Amendment to Loan Modification, Reaffirmation and
Forbearance Agreement (the "Agreement" and, together with the Interim
Agreements, the "Agreements"). The Debt remains subject to all of the terms and
conditions of the Agreements.
The Company has reduced the amount of indebtedness outstanding under the Debt
from approximately $2.7 million as of June 30, 2001, to approximately $1.157
million as of September 1, 2002. As of September 1, 2002, approximately $4.4
million of current assets, consisting of accounts receivable and inventory,
serve as collateral for the Debt. Additionally, all of the Company's other
assets, current and non-current, serve as the total collateral securing the
Debt.
Under the Company's overall current financing and debt structure, the Company's
wholly-owned subsidiaries, Bontex SA (Belgium) and Bontex Italia Srl, each have
separate credit facilities with no cross-collateralization of assets.
Management is focused on obtaining alternative financing to repay the Debt and
provide an ongoing credit facility sufficient to meet the Company's future
operating and capital requirements. In this regard, the Company has recently
received commitments from two lenders which, if accepted and closed, would
enable the Company to refinance the Debt in its entirety. The Company is
presently evaluating both commitments. These commitment letters and the ultimate
loan closings are subject to a number of conditions, including final approval
and acceptance by both the Company and the lenders, as well as final terms of
the loan agreements, amount of excess availability at closing, results of audits
and due diligence by the lenders, and other such factors.
If the Company is unable to refinance the Debt or is unable to pay its
indebtedness to Congress in full by the maturity date, it would cause a material
adverse impact on the Company's business, financial condition, liquidity and/or
results of operations.
The foregoing discussion may contain forward-looking statements within the
meaning of the Private Securities Litigation Act of 1995. Forward-looking
statements include, without limitation, statements about financing plans, cash
flows, availability of capital, growth opportunities, benefits from new
technologies, financial condition, capital expenditures, future results of
operations or market conditions and involve certain risks, uncertainties and
assumptions. The words "estimate," "project," "intend," "expect," "believe," and
similar expressions are intended to identify forward-looking statements. These
and other forward-looking statements are found at various places throughout this
report, and you are cautioned not to place undue reliance on these
forward-looking statements. These forward-looking statements should, therefore,
be considered in light of various relevant factors. Actual results may differ
materially from these forward-looking statements. Factors that could cause or
contribute to those differences include, but are not limited to, excessive
worldwide footwear inventories, a shrinking U.S. domestic market for the
Company's products, decreased sales to key customers, increased competition from
non-woven materials, the reduction of prices by competitors, the increase in the
relative price of the Company's products due to foreign currency devaluations,
increased pulp and latex prices, capital illiquidity, unexpected foreign tax
liabilities, the impact of any unusual items resulting from ongoing evaluations
of the Company's business strategies, decreases in the Company's borrowing base,
increased funding requirements for the Company's pension plan, inability to
recover deferred tax assets, an inability by the Company to renew its current
credit facilities or obtain alternative financing, a market shift in demand from
higher-quality products to more economical grade products with lower profit
margins, higher energy prices, the ultimate outcome, scope and amount of the
fraud, improper financial transactions and issues related to the accounting
systems identified at the Company's Italian subsidiary, and
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increased costs of complying with environmental laws, and the impact of changes
in political, economic or other factors, legal and regulatory changes or other
external factors over which the Company has no control.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(c) Exhibits.
10 (xv) Fifth Amendment to Loan
Modification, Reaffirmation and
Forbearance Agreement, dated September
9, 2002 between Congress Financial
Corporation and Bontex, Inc.
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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 hereunto duly authorized.
BONTEX, INC.
By /s/ James C. Kostelni
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James C. Kostelni
President and Chief
Executive Officer
Date: September 18, 2002