1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13, OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
____________
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
DECEMBER 1, 1995 (NOVEMBER 16, 1995)
JPS TEXTILE GROUP, INC.
- --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE
- --------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION OF INCORPORATION)
33-58272 57-0868166
- --------------------------------------------------------------------------------
(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
555 NORTH PLEASANTBURG DRIVE, SUITE 202,
GREENVILLE, SOUTH CAROLINA 29607-2181
- ----------------------------------------- ------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(803) 239-3900
- --------------------------------------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Page 1 of 75 pages
(Exhibit index appears on page 10)
2
Item 2. Acquisition or Disposition of Assets
On November 16, 1995, pursuant to the terms of an Asset Transfer Agreement
dated as of November 16, 1995, by and among JPS Textile Group, Inc. ("JPS" or
the "Company"), JPS Carpet Corp., a wholly-owned subsidiary of the Company
("Carpet"), Gulistan Holdings Inc. ("Transferee") and Gulistan Carpet Inc., a
wholly-owned subsidiary of the Transferee ("Gulistan"), the Company consummated
the transfer of substantially all of the assets of Carpet used in the business
of designing and manufacturing tufted carpets for sale to residential,
commercial and hospitality markets (the "Carpet Business"). In addition, the
Transferee agreed to assume substantially all of the liabilities and
obligations associated with the Carpet Business. Transferee was formed and is
owned by certain members of the former management team at Carpet.
The consideration for the Carpet Business was approximately $34.1 million,
consisting of $22.8 million of cash paid at closing and debt and equity
securities of Transferee with an estimated fair value of $11.3 million, subject
to certain post-closing adjustments based on the audited amount of working
capital transferred on November 16, 1995. The consideration was determined by
arms-length negotiations between the parties.
The Company will apply the net cash proceeds of approximately $19.0 million
(net of fees, expenses and the estimated post-closing adjustment resulting from
the level of working capital transferred at the closing date) to reduce
outstanding borrowings under its bank credit agreement. Additional information
regarding the transfer of the Carpet Business is contained in the press release
issued by the Company on November 16, 1995, filed as Exhibit 20.1 hereto and
incorporated herein by reference.
2
3
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
(b) Unaudited Pro Forma Consolidated Condensed Balance
Sheet of the Company as of July 29, 1995 reflecting
the disposition of Carpet business and assets as if
the sale occurred as of July 29, 1995. Unaudited Pro
Forma Consolidated Condensed Income Statements for
the nine months ended July 29, 1995 and for the year
ended October 29, 1994 as if the transaction occurred
as of the beginning of the periods indicated.
(c) Exhibits:
20.1 - Press release issued by the Company
on November 16, 1995.*
99.1 - Asset Transfer Agreement, dated as
of November 16, 1995, by and among
the Company, Carpet, Transferee and
Gulistan.*
___________________________
* Filed herewith
3
4
JPS TEXTILE GROUP, INC.
INTRODUCTION TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
(UNAUDITED)
The Unaudited Pro Forma Consolidated Condensed Income Statements for the nine
months ended July 29, 1995 and the year ended October 29, 1994 present the
results of the continuing operations of JPS Textile Group, Inc. assuming that
the transfer of the Carpet Business, as described in item 2 of this report, was
consummated as of the beginning of the periods indicated. The statements
include all material adjustments necessary to present historical results
reflecting these assumptions.
The Unaudited Pro Forma Consolidated Condensed Balance Sheet as of July 29,
1995 assumes that the transfer of the Carpet Business occurred on July 29,
1995. The Unaudited Pro Forma Consolidated Condensed Balance Sheet as
presented assumes a net debt reduction of approximately $23.6 million from the
cash consideration for the transfer of the Carpet Business, including a cash
consideration adjustment based on working capital that would have been
transferred on July 29, 1995.
The pro forma financial information does not purport to be indicative of the
results of operations or the financial position which would have actually been
obtained if the transfer of the Carpet Business had been consummated on the
dates indicated. In addition, the pro forma financial information does not
purport to be indicative of the results of operations or the financial position
of the Company which may be attained in the future.
The pro forma financial information has been prepared by the Company and all
calculations have been made based upon assumptions deemed appropriate. Certain
of these assumptions are set forth under the Notes to Pro Forma Consolidated
Condensed Financial Information. As of the date of this filing, the Company
has reasonably completed its quantification of the final accounting for the
transfer of the Carpet Business based upon currently available information.
Such information may be revised at a later date based upon additional
information. The consideration amount is subject to adjustment based on
audited working capital transferred on November 16, 1995. The amount of such
adjustment is expected to be approximately $3 million payable to Transferee.
The pro forma financial information should be read in conjunction with the
Company's historical consolidated financial statements and notes thereto in its
1994 Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q.
There has not been a prior public filing in which the Carpet Business was given
discontinued operations treatment. Accordingly, the pro forma adjustments to
the Unaudited Pro Forma Consolidated Condensed Income Statements for the nine
months ended July 29, 1995 and the year ended October 29, 1994 and the
Unaudited Pro Forma Consolidated Condensed Balance Sheet as of July 29, 1995
reflect all adjustments necessary to remove the operating results and net
assets of the Carpet Business from those of the Company.
4
5
JPS TEXTILE GROUP, INC.
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEET (UNAUDITED)
JULY 29, 1995
(In Thousands)
Pro Forma Adjustments
------------------------- Pro
Historical Carpet Other Forma
---------- ------------ ---------- ---------
(a)
ASSETS
Current Assets
Cash $ 1,687 $ (954) $ 733
Accounts receivable 87,889 (13,674) 74,215
Inventories 83,177 (25,879) 57,298
Prepaid expenses and other 1,649 (601) 1,048
Net assets held for sale
---------- ---------- ---------
Total current assets 174,402 (41,108) 133,294
Property, plant and equipment, net 197,390 (37,158) 160,232
Excess of cost over fair value of
net assets acquired, net 31,730 31,730
Other assets 49,660 $ 11,312 (b) 60,972
---------- ---------- --------- ---------
TOTAL $ 453,182 $ (78,266) $ 11,312 $ 386,228
========== ========== ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 31,912 $ (8,848) $ 23,064
Accrued interest 4,768 4,768
Accrued salaries, benefits and withholdings 14,089 (2,226) 11,863
Other accrued expenses 13,829 (990) 12,839
Current portion of long-term debt 2,770 2,770
---------- --------- ---------
Total current liabilities 67,368 (12,064) 55,304
Long-term debt 336,819 $ (23,642) (b) 313,177
Other long-term liabilities 23,233 (1,024) 22,209
---------- --------- --------- ---------
Total liabilities 427,420 (13,088) (23,642) 390,690
---------- --------- --------- ---------
Senior redeemable preferred stock 27,199 27,199
---------- --------- --------- ---------
Shareholders' equity (deficit)
Junior preferred stock 250 250
Common stock 10 10
Additional paid-in capital 30,585 30,585
Equity (deficit) (32,282) (65,178) 34,954 (b) (62,506)
--------- --------- --------- ---------
Total shareholders' equity (deficit) (1,437) (65,178) 34,954 (31,661)
--------- --------- --------- ---------
TOTAL $ 453,182 $ (78,266) $ 11,312 $ 386,228
========== ========= ========= =========
See notes to pro forma consolidated condensed financial information.
5
6
JPS TEXTILE GROUP, INC.
PRO FORMA CONSOLIDATED CONDENSED INCOME STATEMENT (UNAUDITED)
FOR THE NINE MONTHS ENDED JULY 29, 1995
(Dollars In Thousands Except Per Share Data)
Pro Forma Adjustments
------------------------- Pro
Historical Carpet Other Forma
---------- ---------- ---------- ----------
(a)
Net sales $ 439,320 $ (89,792) $ 349,528
Cost of sales 376,366 (77,331) 299,035
---------- ---------- ----------
Gross profit 62,954 (12,461) 50,493
Selling, general and administrative expenses 47,225 (16,323) 30,902
---------- ---------- -------- ----------
Income from operations 15,729 3,862 19,591
Interest income 2,127 $ 937 (c) 3,064
Interest expense (31,182) 1,613 (d) (29,569)
Other income (expense), net (885) 9 141 (c) (735)
---------- ---------- --------- ----------
Loss before provision for income taxes,
income from discontinued operations and
extraordinary gain (14,211) 3,871 2,691 (7,649)
Provision for income taxes 1,000 81 (e) 1,081
---------- ---------- --------- ----------
Loss before income from discontinued
operations and extraordinary gain (15,211) 3,871 2,610 (8,730)
Gain on sale of discontinued operations 1,463 1,463
Extraordinary gain on early extinguishment
of debt 17,520 17,520
---------- ---------- --------- ----------
Net income 3,772 3,871 2,610 10,253
Senior redeemable preferred stock in-kind
dividends and discount accretion 2,859 2,859
---------- ---------- --------- ----------
Income applicable to common stock $ 913 $ 3,871 $ 2,610 $ 7,394
========== ========== ========= ==========
Weighted average common shares
outstanding 1,000,000 1,000,000
========== =========
Earnings (loss) per common share:
Loss before income from discontinued
operations and extraordinary gain $ (18.07) $ 3.87 $ 2.61 $ (11.59)
Gain on sale of discontinued operations 1.46 1.46
Extraordinary gain on early
extinguishment of debt 17.52 17.52
---------- ---------- --------- ----------
Net income $ 0.91 $ 3.87 $ 2.61 $ 7.39
========== ========== ========= ==========
See notes to pro forma consolidated condensed financial information.
6
7
JPS TEXTILE GROUP, INC.
PRO FORMA CONSOLIDATED CONDENSED INCOME STATEMENT (UNAUDITED)
FOR THE YEAR ENDED OCTOBER 29, 1994
(Dollars In Thousands Except Per Share Data)
Pro Forma Adjustments
--------------------------- Pro
Historical Carpet Other Forma
---------- ---------- ----------- -----------
(a)
Net sales $ 603,416 $ (141,555) $ 461,861
Cost of sales 516,875 (118,964) 397,911
----------- ---------- -----------
Gross profit 86,541 (22,591) 63,950
Selling, general and administrative expenses 62,448 (22,577) 39,871
----------- ---------- -----------
Income from operations 24,093 (14) 24,079
Interest income 749 $ 1,249 (c) 1,998
Interest expense (57,201) 1,785 (d) (55,416)
Other income (expense), net (2,962) 48 188 (c) (2,726)
----------- ---------- --------- -----------
Loss before provision for income taxes,
income from discontinued operations and
extraordinary gain (35,321) 34 3,222 (32,065)
Provision for income taxes 2,800 97 (e) 2,897
----------- ---------- --------- -----------
Loss before income from discontinued
operations, extraordinary gain and
cumulative effect of accounting change (38,121) 34 3,125 (34,962)
Income from discontinued operations 25,651 25,651
Gain on sale of discontinued operations 132,966 132,966
Extraordinary loss on early extinguishment
of debt (7,410) (7,410)
Cumulative effect of accounting change (1,000) (1,000)
----------- ---------- --------- -----------
Net income 112,086 34 3,125 115,245
Senior redeemable preferred stock in-kind
dividends and discount accretion 3,333 3,333
----------- ---------- --------- -----------
Income applicable to common stock $ 108,753 $ 34 $ 3,125 $ 111,912
=========== ========== ========= ===========
Weighted average common shares outstanding 1,000,000 1,000,000
=========== ===========
Earnings (loss) per common share:
Loss before income from discontinued
operations, extraordinary gain and
cumulative effect of accounting change $ (41.46) $ 0.03 $ 3.13 $ (38.30)
Income from discontinued operations 25.65 25.65
Gain on sale of discontinued operations 132.97 132.97
Extraordinary loss on early extinguishment
of debt (7.41) (7.41)
Cumulative effect of accounting change (1.00) (1.00)
----------- ---------- --------- -----------
Net income $ 108.75 $ 0.03 $ 3.13 $ 111.91
=========== ========== ========= ===========
See notes to pro forma consolidated condensed financial information.
7
8
JPS TEXTILE GROUP, INC.
NOTES TO PRO FORMA CONSOLIDATED CONDENSED FINANCIAL INFORMATION
(a) To eliminate the Carpet assets and liabilities in the July 29, 1995
Unaudited Pro Forma Consolidated Condensed Balance Sheet and operating
results in the Unaudited Pro Forma Consolidated Condensed Income
Statements for the nine months ended July 29, 1995 and the year ended
October 29, 1994.
(b) To reflect the use of net cash proceeds to reduce $23.6 million of
bank debt as of July 29, 1995. Net cash proceeds at July 29, 1995
include cash consideration of $22.8 million plus a pro forma
adjustment of $1.3 million based on the July 29, 1995 working capital
less expenses of $0.4 million and income taxes of $0.1 million. Debt
and equity securities issued to JPS by the Transferee are reflected as
other non-current assets at their fair value of approximately $11.3
million.
(c) To reflect accrual of non-cash interest income and accretion of
discounts from face values of debt securities (classified as interest
income) and of senior preferred stock (classified as other income)
issued by the Transferee to the Company.
(d) To reflect reduced interest expense associated with the reduction in
long-term debt.
(e) To reflect an increase in taxes resulting from the decrease in
interest expense described in note (d).
8
9
SIGNATURE
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.
JPS TEXTILE GROUP, INC.
By: /s/ David H. Taylor
----------------------------
David H. Taylor
Executive Vice President -
Finance and Secretary
Date: December 1, 1995
9
10
Exhibit Index
Exhibit No. Description of Exhibit
20.1 Press release issued by the Company on November 16, 1995.*
99.1 Asset Transfer Agreement, dated as of November 16, 1995, by
and among the Company, JPS Carpet Corp., a Delaware
corporation, Gulistan Holdings Inc. ("GHI"), a Delaware
corporation and Gulistan Carpet Inc., a Delaware Corporation
and wholly-owned subsidiary of GHI.*
______________________
* Filed herewith
10