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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 28, 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 identification no.)
incorporation or organization)
1315 PHILLIPS ST., DYERSBURG, TENNESSEE 38024
(Address of principal executive offices) (Zip Code)
(901) 285-2323
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, Par Value $.01/Share New York Stock Exchange
(Title of each class) (Name of exchange on which registered)
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 or any amendment to
this Form 10-K. [ X ]
As of December 3, 1996, 13,127,508 shares of common stock were outstanding.
The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $73,382,000 based on the closing price of such
stock on the New York Stock Exchange (NYSE) on December 3, 1996, assuming, for
purposes of this report, that all executive officers and directors of the
registrant are affiliates.
DOCUMENTS INCORPORATED BY REFERENCE
PART III
Portions of the Registrant's Proxy Statement for the Annual Meeting of
Shareholders to be held on January 22, 1997, are incorporated by reference
into Items 10, 11, 12 and 13.
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DYERSBURG CORPORATION
FORM 10-K REPORT
TABLE OF CONTENTS
Item No. Page
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PART I
1. Business
General....................................... 3
Products...................................... 4
Manufacturing/Seasonality..................... 5
Sales and Marketing........................... 6
Research and Development...................... 6
Raw Materials................................. 7
Competition................................... 7
Regulation.................................... 7
Employees..................................... 8
Forward Looking Statements/Risk Factors....... 8
Executive Officers of the Registrant.......... 8
2. Properties......................................... 10
3. Legal Proceedings.................................. 10
4. Submission of Matters to a Vote of
Security Holders................................. 11
PART II
5. Market for Registrant's Common Equity
and Related Stockholder Matters
Market Information........................... 12
Holders...................................... 12
Dividends.................................... 12
6. Selected Financial Data............................ 13
7. Management's Discussion and Analysis of
Financial Condition and Results of Operations.... 14
8. Financial Statements and Supplementary Data........ 18
9. Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure........... 35
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PART III
10. Directors and Executive Officers of the
Registrant....................................... 35
11. Executive Compensation............................. 35
12. Security Ownership of Certain
Beneficial Owners and Management................. 35
13. Certain Relationships and Related
Transactions..................................... 35
PART IV
14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K.......................... 35
Signatures................................................. 36
Index to Exhibits.......................................... 37
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PART I
ITEM 1. BUSINESS
General
Dyersburg Corporation, through its wholly-owned subsidiary Dyersburg Fabrics
Inc. ("Fabrics") and the partnership referenced below, is one of the largest
manufacturers of knit fleece fabrics sold to the domestic "cut-and-sew" apparel
manufacturing industry and also produces jersey fabrics for women's and
children's apparel. Dyersburg Corporation acquired United Knitting, Inc.
("UKI") in 1994 adding stretch fabrics and lightweight lining fabrics to its
product line. UKI and the partnership referenced below supply fabrics to
major brand name producers of bodywear, swimwear, active sportswear and
intimate apparel.
Fabrics owns all of the outstanding capital stock of Dyersburg Fabrics
Investment Corporation ("DFIC"), a Delaware corporation and intermediate
investment corporation. DFIC owns a 99% limited partnership interest in
Dyersburg Fabrics Limited Partnership ("DFLP"). The remaining 1% partnership
interest in DFLP is owned by Fabrics as a general partner (unless otherwise
indicated, all references herein to Fabrics include DFIC and DFLP). UKI owns
all of the outstanding capital stock of United Knitting Investment Corporation
("UKIC"), a Delaware corporation and intermediate investment corporation. UKIC
owns a 99% limited partnership interest in United Knitting Limited Partnership
("UKLP"). The remaining 1% limited partnership interest in UKLP is owned by
UKI as a general partner (unless otherwise indicated, all references herein to
UKI include UKIC and UKLP). During 1996, Fabrics formed a wholly-owned
separate subsidiary, IQUE, Inc. ("IQUE"), to provide full garment sourcing
through strategic contractual alliances. IQUE owns all of the outstanding
capital stock of IQUE Investment Corporation ("IIC"), a Delaware corporation
and intermediate investment corporation. IIC owns a 99% limited partnerhip
interest in IQUE Limited Partnership ("ILP"). The remaining 1% partnership
interest in ILP is owned by IQUE as a general partner (unless otherwise
indicated, all references to IQUE include IIC and ILP). Unless the context
otherwise requires, the term "the Company" as used herein refers to Dyersburg
Corporation and its subsidiaries. The Company was formed in 1929.
Fabrics' manufacturing operation is vertically integrated, beginning with
spinning yarn from fiber, combining that yarn with purchased yarns to knit
fabric, dyeing and finishing that fabric, and then selling it to the
"cut-and-sew" apparel industry. Fleece fabrics produced by Fabrics are used
primarily in the production of children's and women's activewear (sweatshirts
and sweatpants) and infant blanket sleepers. Jersey fabric produced by Fabrics
is used in a broad range of children's and women's lightweight apparel, such as
tops and shorts. Fabrics' outerwear fleece is designed for use in skiwear,
hunting apparel and other outdoor activity products. In addition, Fabrics
manufactures related knit fabrics
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for certain other products, including gloves, meat stockinettes (bags used to
hang hams and other meats for smoking and curing), knit orthopedic products,
and knit cuffs for surgical gowns.
UKI's fabrics are knit from purchased yarns of natural and synthetic fibers
combined with performance yarns, including spandex, to provide specific dynamic
stretch and shrinkage characteristics. UKI also produces lightweight lining
fabrics for use in swimwear and women's hosiery.
The Company does not have business operations in more than one industry segment
and has no foreign manufacturing operations or significant export sales.
Products
Fleece
Fleece fabric is made of acrylic, polyester, cotton, or blends of these fibers.
The fabric is dyed and undergoes a series of finishing and abrading processes
by which a surface is brushed or "napped" to give the fabric the "hand" or feel
associated with fleece. In 1992, Fabrics introduced a new line of outerwear
fleece designed for use in performance-related outdoor apparel products. In
1993, this product line was complemented by the introduction of Dyersburg
E.C.O. outerwear fleece made of yarn using fibers from recycled, plastic soft
drink bottles. The list of branded outerwear fleece products have grown to
include Kinderfleece targeted to children's outerwear, Citifleece(TM) targeted
to adult outerwear, Dyersburg E.C.O. Lite(TM), a lighter weight E.C.O.
product, and Chamee(TM), a new microdenier product line. Garments manufactured
from these products are primarily sold to large catalog merchants and specialty
retailers.
Excluding the outerwear fleece designs, a majority of the fleece fabrics
historically manufactured by Fabrics are used to produce garments for discount
retailers and chain stores. Fleece fabrics sales are seasonal with peak
activity during the third and fourth fiscal quarters and significantly less
activity during the first and second fiscal quarters.
The principal use of Fabrics' fleece fabrics are in manufacturing children's
activewear and infant blanket sleepers. Fleece fabrics sold by Fabrics to the
children's activewear market, principally sweatshirts and sweatpants, are made
of 100% acrylic fibers and polyester/cotton blends. Acrylic's low cost,
ability to be dyed brighter colors, and low shrinkage are of particular
importance to the children's activewear market.
Fleece fabrics sold to manufacturers of women's activewear are primarily made
either of 50% polyester/50% cotton blends or polyester/cotton blends with a
higher cotton content. In recent years, there has been increased use in
activewear apparel of
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polyester/cotton blends, which management believes is attributable to increased
consumer demand for natural fibers, as well as the greater receptivity of these
fabrics to printing compared to 100% acrylic fabrics. Polyester/cotton blends
are also typically softer and less likely to "pill" than 100% synthetics, while
still offering less fabric shrinkage than 100% cotton products.
Fabrics' other major fleece fabric product categories are fabrics used to
manufacture infant blanket sleepers and for home furnishings. The demand for
infant blanket sleepers is primarily attributable to its fire retardant
characteristics. Maison Fleece(TM), headlines the product offerings in the
growing home furnishings market.
Jersey
Fabrics markets a line of jersey fabrics for use in a broad range of women's
and children's apparel, principally tops and shorts, with the objectives of
increasing penetration of Fabrics' customer base and reducing the seasonal
aspects of the Company's production operations. Jersey is a flat-knit fabric,
which is typically made from a polyester/cotton blend or from 100% cotton
fibers and, unlike fleece, is not surface-finished. Jersey fabrics are also
generally lighter in weight than fleece. A majority of Fabrics' jersey fabric
production and sales is concentrated in Fabrics' first two fiscal quarters and,
therefore, tends to offset the seasonality of the Company's fleece fabric
business.
Stretch
Stretch fabrics (produced at UKI's Cleveland, Tennessee facility) consist of
custom formulations of cotton, spandex, nylon and other synthetic yarns
designed for maximum comfort, performance and styling. To produce a variety of
shades and patterns, stretch fabrics may be knit from package-dyed yarns, dyed
as cloth, sold to independent printers for printing or garment-dyed by the
customer. These fabrics are used in a variety of athletic products including
dancewear, swimsuits, biking and running garments and intimate apparel. The
majority of these fabrics are used by leading manufacturers to produce
higher-priced branded sportswear products. A new stretch product,
Synsation(TM), was introduced in late 1996 aimed at revitalizing the swimwear
business.
Manufacturing/Seasonality
Fabrics has two manufacturing plants in Dyersburg and one plant in Trenton,
Tennessee. The original Dyersburg plant spins 100% synthetic (acrylic or
polyester) and 50% polyester/50% cotton yarns. The Trenton plant spins 100%
cotton yarns as well as cotton/synthetic blends. These yarns are used along
with yarns purchased from outside sources to knit fleece and jersey fabrics at
the Dyersburg knitting facility prior to dyeing and finishing. UKI's plant in
Cleveland, Tennessee uses yarn from Fabrics as well
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as purchased yarn from outside sources to knit, dye and finish stretch and
lining fabrics.
The Company's revenues and earnings as well as working capital requirements
fluctuate during the fiscal year due to the seasonal nature of Fabrics' and
UKI's businesses. See "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations".
Sales and Marketing
The Company's customers negotiate their purchases from the Company through
informal purchase orders that specify their anticipated fabric needs over
periods as long as ten months. The orders are revocable and serve primarily to
outline the customers' intentions over a specified term and permit the Company
to "block out" its production schedule. Although orders are subject to
cancellation by customers at any time before the Company receives color
specifications from the customers, fabric produced for cancelled orders can
ordinarily be used to fill other orders. Because these informal purchase
orders are cancelable, the Company has no appreciable long-term backlog.
Fabrics maintains sales offices in Chicago and New York and also generates some
sales through independent sales agents. UKI utilizes a network of independent
sales agents coordinated through its marketing organization in New York, New
York.
The Company's largest five customers accounted for approximately 23% of total
sales in 1996 with no individual customer responsible for more than 9% of total
sales.
Research and Development
Fabrics' research and development activities are directed toward the
development of new products (i.e., varieties of fabrics) to meet the changing
needs of the market. Emphasis is placed on physical characteristics that
provide competitive differentiations between fabrics including "hand" or feel,
warmth, fade resistance and shrinkage reduction. Efforts are also made to
enhance aesthetic qualities of certain fabrics such as the E.C.O. fabrics
line's consideration of the environmental impact of production processes.
UKI's research and development activities are focused on providing innovative
stretch fabrics that will meet the evolving needs of its customers, while
developing new products to gain entry in other markets. UKI was instrumental
in developing products from Dupont Lycra(R) spandex and Dupont Supplex(R) nylon
to provide customers with new types of performance fabrics that exhibit unique
properties.
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The costs of the Company's research and development activities are not
considered by management to be material to the results of operations or the
financial condition of the Company.
Raw Materials
Fabrics uses three primary fibers as raw material for producing yarn: acrylic,
polyester and cotton. Cotton makes up approximately 35%, acrylic approximately
15%, and polyester approximately 45% of the raw material fiber used in
production. Cotton is an agricultural commodity, while acrylic and polyester
are petroleum based. These items are subject to market price fluctuations, but
supplies are not dependent on any single vendor, and management believes that
sources for materials will be adequate to meet requirements. UKI purchases
yarns from a number of vendors and maintains several sources for branded and
non-branded spandex and synthetic blend yarns.
Competition
The textile industry is extremely competitive and includes numerous companies,
no one of which is dominant in the industry. The Company and its competitors
market their products nationwide as domestic shipping costs are not a
significant competitive factor. The Company's primary competition comes from
suppliers to the cut and sew trade. The Company also competes with vertically
integrated manufacturers that not only produce fabric but also produce finished
products from that fabric.
Regulation
The Company is subject to federal, state and local laws and regulations
affecting its business, including those promulgated under the Occupational
Safety and Health Act (OSHA), the Consumer Product Safety Act, the Flammable
Fabrics Act, the Textile Fiber Product Identification Act, and the rules and
regulations of the Consumer Products Safety Commission. Among other things,
OSHA imposes cotton dust standards and noise level standards at all of the
Company's knitting facilities. Additionally, the Company must comply with
industry specific legislation.
The Company's facilities generate waste water, other waste, and air emissions
that are subject to local regulations and federal and state laws. The Company
believes its disposition of such waste and its emissions are in substantial
compliance with all applicable governmental requirements.
The Company is currently assessing the effect on its competitive position of
recent developments in U.S. import-export restrictions. Although no assurances
can be given in this regard, the Company does not believe that the passage of
the North American Free Trade Agreement and the General Agreement on Tariffs
and Trade has had or will have a material effect on the Company's competitive
position or results of operations.
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Employees
At September 28, 1996, the Company employed approximately 1,392 people in
hourly, salaried, supervisory, management, and administrative positions. No
labor union represents any of the Company's employees and the Company has not
experienced a work stoppage in more than 50 years.
Forward-Looking Statements/Risk Factors
This Form 10-K contains certain forward-looking statements regarding
the anticipated financial and operating results of the Company. The Company
undertakes no obligation to publicly release any revisions to any
forward-looking statements contained herein to reflect events or circumstances
occurring after the date hereof or to reflect the occurrence of unanticipated
events. In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, the Company is including the
following cautionary statements identifying important factors that could cause
the Company's actual results to differ materially from those projected in
forward-looking statements made by, or on behalf of, the Company. These
factors, many of which are beyond the Company's control, include changes in the
cost and availability of raw materials, competition with other suppliers, the
cost and availability of labor, governmental regulation, governmental trade
policies with foreign nations and changes in demand or product mix.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information regarding executive officers
of the Company as of September 28, 1996. All positions are held with Dyersburg
Corporation and Fabrics unless otherwise noted. All officers serve at the
discretion of the Board of Directors.
Name Age Position
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T. Eugene McBride 53 President, Chief
Executive
Officer and Chairman
James E. Herring 51 President - IQUE
Jerome M. Wiggins 56 President - Operations
Janice L. Whitlock 45 President - Marketing
William S. Shropshire, Jr. 39 Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
Stephen J. Dauer 55 Sr. Vice President-
Sales
Paul L. Hallock 48 Vice President-Finance
Jerry W. Miller 45 Vice President -
Manufacturing
Jerry W. Patton 49 Vice President -
Administration
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Margaret Schenck 48 Vice President -
Operations/Customer
Development, UKI
The following is additional information with respect to the above-named
executive officers.
Mr. McBride joined the Company in September 1988 as Executive Vice President.
He had previously been employed by Pannill Knitting Mills as Vice
President-Operations since December 1986. He was named President and Chief
Operating Officer in January 1989. He was named Chief Executive Officer in
September 1990 and Chairman of the Board of Directors in July 1995.
Mr. Herring has been President of IQUE since December 1996. Prior to becoming
President of IQUE, he was President and Chief Executive Officer of UKI since
January, 1994 when it was acquired by the Company. Mr. Herring was also
elected as a director of the Company, Fabrics and UKI since January 1994. Mr.
Herring served as President of UKI from 1983 to 1991 and as Chairman of the
Board and Chief Executive Officer from 1991 until its acquisition by the
Company.
Mr. Wiggins has been President - Operations since January 1996. He joined the
Company in August 1989 as Vice President and Chief Financial Officer, Treasurer
and Secretary. He had previously been employed by VF Corporation (a
manufacturer of apparel) since 1975 and in 1982 became Vice President of
Finance and Chief Financial Officer of that company.
Ms. Whitlock, President - Marketing since December 1995, joined the Company in
September 1994 as Vice President of Merchandising. Previously, she was Vice
President of Merchandising at Flynt Fabrics and Burlington Industries.
Mr. Shropshire, a certified public accountant, joined the Company as Executive
Vice President, Chief Financial Officer, Secretary and Treasurer on September
28, 1996. For the previous five years, he was Chief Financial Officer and
Senior Vice President for Charter Bancshares, Inc.
Mr. Dauer became the Sr. Vice President - Sales in January 1996, after joining
the Company as Vice President-Marketing in June 1984. He had previously been
employed since 1966 by Burlington Industries (a diversified textile company)
and, in 1980, became Vice President of Sales and Marketing-Women's Apparel in
that company's Knitted Fabric Division.
Mr. Hallock joined the Company in April 1977. He was named Assistant Secretary
in October 1978, Assistant Secretary- Treasurer in October 1981, and was named
Vice President-Finance in March 1987.
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Mr. Miller joined the Company in August 1993 as Director of Manufacturing and
was named Vice President of Manufacturing in May 1994. Before coming to
Dyersburg, he was Director of Manufacturing with Sara Lee Products, which
included textiles and apparel manufacturing.
Mr. Patton joined the Company in 1966 in the production area. He was named MIS
Director in May 1990. In September, 1994, he was named Vice President-MIS.
Since January, 1996, Mr. Patton has been Vice President - Administration.
Ms. Schenck has been Vice President - Operations/Customer Development, UKI,
since January 1994, when UKI was acquired by the Company. For more than five
years prior to that time, she was Vice President - Operations/Customer Service
at UKI.
ITEM 2. PROPERTIES
The Company's business is conducted primarily through facilities located in
Dyersburg, Trenton and Cleveland, Tennessee. All of these facilities and the
property on which they are located are owned by the Company. The Company
leases selling offices in Chicago, Illinois, and New York, New York with square
footage of approximately 716 and 7,364, respectively. The Company leases
approximately 1,000 square feet in Cleveland, Tennessee, for its IQUE corporate
offices.
The primary Dyersburg facility was built in 1929 with 275,000 square feet of
floor space. After several expansions, it now contains 888,350 square feet of
plant space situated on 30 acres of land. The knitting facility (completed
December 1993) encompasses 155,000 square feet situated on 30 acres in the
Dyersburg Industrial Park. The floor space is distributed as follows: 682,800
square feet for manufacturing, 273,300 square feet for warehousing and
distribution, 27,800 square feet for offices, and 59,500 square feet for
maintenance shops and boiler space.
The Trenton facility was built in the 1930's with 94,000 square feet of floor
space and has been expanded to 187,919 square feet. The floor space is
distributed as follows: 97,881 square feet for manufacturing, 61,296 square
feet for warehousing, 23,837 square feet for office space, and 4,905 square
feet for maintenance and boiler space.
The Cleveland facility was built in 1986 with 70,000 square feet of floor space
followed by a 38,000 square foot expansion in 1991. A 45,000 square foot
addition (primarily warehouse, distribution, and laboratory facilities) was
completed in December 1994.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to various routine lawsuits arising out of the conduct
of its business, none of which are expected by the Company to have a material
adverse effect upon the Company.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of shareholders during the fourth quarter
of the fiscal year ended September 28, 1996.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Market Information
The Company's Common Stock is traded on the New York Stock Exchange under the
symbol "DBG." The range of high and low sales prices of the Common Stock
during each quarter of the last two years are presented below:
High Low
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1995 First........ $6 5/8 $5 1/8
Second....... 6 1/4 5 1/4
Third........ 6 4 5/8
Fourth....... 5 1/2 4 1/4
1996 First........ $6 1/4 $4 1/4
Second...... 5 3 7/8
Third........ 5 1/2 4 3/8
Fourth....... 6 4 1/2
Holders
As of December 3, 1996, the Company had approximately 2,700 shareholders based
on the number of record holders of the Company's Common Stock and an estimate
of the number of individual participants represented by security position
listings.
Dividends
During each quarter of fiscal 1996 and fiscal 1995, the Company declared and
paid regular quarterly cash dividends of $.01 per share of Common Stock.
The documents relating to the Company's primary credit facility and
institutional notes permit dividends and certain other payments, including
stock repurchases, by the Company provided that, after such payments, the
Company is in compliance with certain financial covenants. As of September 28,
1996, the Company was in compliance with such financial covenants, and
management of the Company does not believe that such restrictions are likely to
limit materially the anticipated future payments of dividends on the Common
Stock.
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ITEM 6. SELECTED FINANCIAL DATA
SELECTED FINANCIAL DATA
DYERSBURG CORPORATION 1996 ANNUAL REPORT
1996 1995 1994(1) 1993 1992(2)
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(In Thousands, except ratios, percentages and per share data)
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SUMMARY OF OPERATIONS:
Net sales $195,866 $199,413 $180,520 $151,283 $151,497
Income before income taxes and
extraordinary item 14,254 12,542(3) 17,844 17,846 14,343
Income taxes 5,854 5,982 7,496 7,738 6,619
Income before extraordinary item 8,400 6,560 10,348 10,108 7,724
Extraordinary item --- --- --- (472) (2,238)
Net income 8,400 6,560 10,348 9,636 5,486
PER SHARE OF COMMON STOCK:
Income before extraordinary item $ 0.62 $ 0.46 $ 0.74 $ 0.74 $ 0.72
Extraordinary item --- --- --- (0.03) (0.21)
Net income 0.62 0.46 0.74 0.71 0.51
Cash dividend (pre-IPO)(4) --- --- --- --- 0.58
Cash dividend (post-IPO) 0.04 0.04 0.04 0.04 0.02
Stock range:
High 6 1/4 6 5/8 8 3/4 8 5/8 9 7/8
Low 3 7/8 4 1/4 6 3/8 5 1/2 5 7/8
Book value 6.75 6.08 5.65 4.80 4.10
Weighted average common
shares outstanding 13,643 14,196 14,010 13,573 10,721
CAPITAL EXPENDITURES
AND DEPRECIATION:
Capital expenditures $ 11,778 $ 12,816 $ 14,278 $ 6,632 $ 10,256
Depreciation 9,573 10,001 8,630 7,948 7,172
STATISTICAL DATA:
Income before extraordinary
item to average
shareholders' equity(5) 9.76% 7.90% 14.40% 17.10% 22.90%
Inventory turnover(6) 5.20 5.96 5.74 6.22 7.22
Accounts receivable turnover(7) 5.63 5.53 5.68 5.89 5.97
Interest coverage(8) 3.31 3.03 4.58 5.14 2.40
Current ratio 4.37 3.79 3.65 4.01 3.11
SELECTED BALANCE SHEET DATA:
Working capital $ 52,083 $ 45,227 $ 47,219 $ 33,747 $ 26,294
Total assets 195,007 188,872 194,192 148,040 145,322
Long-term obligations 80,950 76,800 87,276 64,900 70,400
Shareholders' equity 88,742 86,258 80,266 65,161 55,700
(1)Includes operations of United Knitting, Inc., effective January 19, 1994.
(2)Fifty-three weeks.
(3)Includes a pre-tax write-down of fixed assets of $2,153.
(4)This represents a one-time dividend paid prior to the initial public
offering and does not reflect the future intent of the Company with respect
to dividends.
(5)Income before extraordinary item divided by quarterly average of
shareholders' equity.
(6)Cost of goods sold divided by monthly average inventory.
(7)Net sales divided by monthly average net accounts receivable.
(8)Net income before interest, taxes and extraordinary item divided by the sum
of annual interest and amortization of debt costs.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OPERATIONS
The Company's fiscal year ends on the Saturday closest to September 30. Results
for 1994 include the operations of Dyersburg Fabrics Inc. ("Fabrics") and those
of United Knitting, Inc. ("UKI") from January 19, 1994, the date of its
acquisition by the Company.
1996 As Compared With 1995
Net income increased to $.62 per share for 1996, as compared to $.46 per share
in the prior year. Results for the year ended September 30, 1995, included an
after-tax charge of $1.5 million, or $0.11 per share, principally related to
the replacement of certain manufacturing equipment. Driving this increase in
earnings per share was an increase in the gross margin to 21.9% in 1996, as
compared to 20.1% in 1995. Margin increases were the result of a product shift
to higher margin fabrics in 1996. This increase in gross margins more than
offset a modest decline in net sales dollars for the current year. Net sales
approximated $196 million in 1996. The decline from 1995's peak of $199
million was primarily due to a decreased demand for jersey and sleeper fabrics.
The Company's successful marketing initiative to produce and sell new products
was supported by significant investments in capital expenditures. Purchased
and leased equipment during the previous five years have approximated $67
million. These expenditures included an expanded distribution facility, a
separate knitting facility, expanded finishing and dyeing facilities and
installing modern, high-efficiency yarn manufacturing equipment. These
expenditures for manufacturing equipment allow the Company to produce more
technically complex fabrics, which in turn provide higher gross margins.
Higher customer satisfaction and lower production costs also have resulted from
improvements in delivery and the quality of production.
In addition to the Company's investment in manufacturing equipment, the Company
undertook a significant investment in an expanded marketing program. The
expansion of the marketing staff, and to a lesser degree increased promotions,
contributed to an increase in selling, general and administrative costs to
$20,707,000, or 10.6% of sales in 1996 versus 8.7% in 1995. The return on the
investment in additional marketing initiatives already has been reflected in
our fourth quarter sales, which increased by 11%, to $59 million. These
initiatives will continue into 1997 as the Company calls on new customers
offering new products.
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Interest and debt amortization expense for 1996 was unchanged from 1995 at $6.2
million. Average outstanding debt and interest rates were substantially level
for 1995 and 1996.
The provisions for income taxes of $5.9 million for 1996 and $6.0 million for
1995 were higher than the federal statutory rate due to state income taxes and
the nondeductibility of amortization of goodwill. The effective tax rate
declined from 47.7% in 1995 to 41.1% in 1996, primarily due to a legal
restructuring implemented by the Company at mid- year which resulted in a
reduction in certain state taxes. The lower effective tax rate should continue
into future periods.
1995 As Compared With 1994
Net sales increased 10.5% in 1995 compared to 1994. A majority of the
increase was due to a shift in sales toward higher priced cotton and outerwear
fleece products. The remainder of the increase was primarily attributable to
the inclusion of UKI for the full 12-month period in 1995. Gross margins
declined from 22.6% in 1994 to 20.1% in 1995. The decline in gross margins
resulted from significant increases in raw material costs which the Company was
unable to fully recover through price increases.
Selling, general and administrative costs decreased as a percent of sales to
8.7% in 1995 versus 9.0% in 1994. The decline relative to sales resulted from
reduced incentive compensation payments and a lower contribution to the
Company's profit sharing plans, which was partially offset by higher
commissions and sales-related expenses.
During the fourth quarter of 1995, the Company committed to replace certain
yarn manufacturing equipment with more modern and efficient machinery. The
write-down of the book value of existing equipment, net of proceeds from its
sale, resulted in an after-tax charge to operations of $1.5 million, or $0.11
per share.
Interest and debt amortization expense for 1995 was $6.2 million compared with
$5.0 million in 1994. This increase resulted primarily from 1995's higher
interest rates. The average balance on long-term debt outstanding for 1995
approximated that of 1994.
LIQUIDITY AND CAPITAL RESOURCES
Funds generated from the Company's operations are the major source of
liquidity. Net cash provided by operating activities totaled $13.6 million,
$23.3 million, and $15.2 million in 1996, 1995 and 1994, respectively. These
cash flows are supplemented primarily by borrowings, including a bank-funded
revolving line of credit of $80 million maturing on July 16, 1998. Amounts
outstanding on this credit facility bear interest at variable rates. The
average balances outstanding and the average interest rates paid for 1996,
15
17
1995 and 1994 were approximately $50,884,000, $51,731,000, and $46,783,000,
respectively, and 7.2%, 7.1% and 5.4%, respectively. At September 28, 1996,
the Company had unused revolving credit of $23.8 million. Further reference is
made to Note 4 to the consolidated financial statements beginning on page 27.
Working capital at September 28, 1996 was $52.1 million versus $45.2 million at
September 30, 1995. The Company's current ratio was 4.4:1 and its
debt-to-capital ratio was 48% at September 28, 1996, compared to 3.8:1 and 47%,
respectively, at September 30, 1995.
Net accounts receivable were $5.5 million higher at September 28, 1996 than
September 30, 1995, due primarily to higher sales volume in the fourth quarter
of 1996. Inventories increased slightly from $22.2 million at September 30,
1995 to $23.2 million at September 28, 1996, principally as a result of higher
per-unit costs due to shifts in product mix.
The Company's business has a pronounced seasonal pattern with the majority of
sales occurring during the third and fourth fiscal quarters. The following
table sets forth the net sales and percentage of net sales for the Company by
fiscal quarter for the last three fiscal years.
1996 1995 1994(a)
- ------------------------------------------------------------------------
First Quarter $30,088 15.4% $ 40,679 20.4% $ 22,918 12.7%
Second Quarter 42,344 21.6 48,370 24.2 37,875 21.0
Third Quarter 64,142 32.7 57,021 28.6 61,937 34.3
Fourth Quarter 59,292 30.3 53,343 26.8 57,790 32.0
-------- ------ -------- ------ -------- ------
$195,866 100.0% $199,413 100.0% $180,520 100.0%
======== ====== ======== ====== ======== ======
(a) Includes the following UKI sales (in thousands): $8,358, second quarter;
$10,828, third quarter and $10,341, fourth quarter.
Due to this seasonal pattern of the Company's sales, inventories are lowest at
the end of the fiscal year and gradually increase over the following six months
in anticipation of the peak selling period. Receivables tend to decline during
the first fiscal quarter and are at their lowest point during December through
February. The net result is increased working capital requirements from
January through late in the fourth quarter.
On October 4, 1995, the Company approved a plan to repurchase up to 2,000,000
shares of Dyersburg Corporation common stock. During 1996, the Company
repurchased 1,051,275 shares at a total cost of $5.4 million.
16
18
Capital expenditures during 1996, 1995 and 1994 were $11.8 million, $12.8
million and $14.3 million, respectively. Capital spending is anticipated to
approximate $11.5 million in 1997. The Company believes that cash flow from
operations and the existing revolving credit facility will be sufficient to
meet operating needs and fund the capital spending and stock repurchase
program.
INFLATION
Similar to other textile and apparel manufacturers, the Company is dependent on
the prices and supplies of certain principal raw materials including cotton,
acrylic and polyester fibers. During 1996, raw material prices for polyester
and acrylic stabilized after significant increases in 1996, while prices for
cotton continued to increase. Heretofore in 1997, there has been a reduction
in raw material prices. The long-term impact of subsequent raw material price
fluctuations on the Company's performance is, however, uncertain. The Company
intends to support margins through continued efforts to improve the product mix
and improve product pricing as market conditions permit.
Quarterly Financial Information (Unaudited)
1996
First Second Third Fourth
(In thousands, except per share data)
Net sales $30,088 $42,344 $64,142 $59,292
Gross profit 5,750 7,896 14,638 14,698
Net income (124) 848 3,881 3,795
Net income per share (0.01) 0.06 0.28 0.29
Market prices of common stock:
High 6 1/4 5 5 1/2 6
Low 4 1/4 3 7/8 4 3/8 4 1/2
1995
First Second Third Fourth
(In thousands, except per share data)
Net sales $40,679 $48,370 $57,022 $53,342
Gross profit 6,998 9,603 12,382 11,185
Net income 403 1,871 3,065 1,221(a)
Net income per share 0.03 0.13 0.22 0.09
Market prices of common stock:
High 6 5/8 6 1/4 6 5 1/2
Low 5 1/8 5 1/4 4 5/8 4 1/4
(a) Includes pre-tax write-down of fixed assets of $2,153.
17
19
Item 8. Financial Statements and Supplementary Data
The financial statements set forth below are included on pages 19-33.
Page of
Form 10-K
Report of Independent Auditors 19
Consolidated Balance Sheets as of September 28,
1996 and September 30, 1995 20
Consolidated Statements of Income for the year 21
ended September 28, 1996, September 30, 1995,
and October 1, 1994
Consolidated Statements of Shareholders' Equity 22
for the years ended September 28, 1996,
September 30, 1995, and October 1, 1994
Consolidated Statements of Cash Flows for the 23
years ended September 28, 1996, September 30,
1995, and October 1, 1994
Notes to Consolidated Financial Statements 24
Schedules:
Schedule II - Valuation and Qualifying Accounts 34
All other financial statement schedules are omitted
as the information is not required or because the
required information is presented in the financial
statements or the notes thereto.
18
20
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Dyersburg Corporation
We have audited the accompanying consolidated balance sheets of Dyersburg
Corporation as of September 28, 1996 and September 30, 1995, and the related
consolidated statements of income, shareholders' equity, and cash flows for
each of the three years in the period ended September 28, 1996. Our audits also
included the financial statement schedule listed in the Index at Item 14(a).
These financial statements and schedule are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Dyersburg
Corporation at September 28, 1996 and September 30, 1995, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended September 28, 1996, in conformity with generally accepted
accounting principles. Also, in our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.
/s/ Ernst & Young LLP
Memphis, Tennessee
October 22, 1996
19
21
Dyersburg Corporation
Consolidated Balance Sheets
September 28, 1996 September 30, 1995
----------------------------------------
(In thousands, except share data)
Assets
Current assets:
Cash $ 983 $ 974
Accounts receivable, net of allowance for doubtful accounts
of $1,500 in 1996 and $1,170 in 1995 42,427 36,920
Inventories 23,248 22,238
Prepaid expenses and other 858 1,286
--------------------------------
Total current assets 67,516 61,418
Property, plant and equipment, net 67,758 65,834
Goodwill, net 59,097 60,954
Deferred debt costs and other, net 636 666
--------------------------------
$ 195,007 $ 188,872
================================
LIABILITIES AND SHAREHOLDERSG EQUITY
Current liabilities:
Trade accounts payable $ 8,296 $ 10,515
Accrued expenses 6,700 5,676
Income taxes payable 437 -
--------------------------------
Total current liabilities 15,433 16,191
Long-term obligations 80,950 76,800
Deferred income taxes 8,765 8,305
Other liabilities 1,117 1,318
Commitments and contingencies
ShareholdersG equity:
Common stock, $.01 par value, authorized 40,000,000 shares;
issued and outstanding shares -13,154,508 in 1996 and
14,196,228 in 1995 132 142
Additional paid-in capital 41,460 46,821
Retained earnings 47,150 39,295
--------------------------------
Total shareholders' equity 88,742 86,258
--------------------------------
$ 195,007 $ 188,872
================================
See accompanying notes.
20
22
Dyersburg Corporation
Consolidated Statements of Income
YEAR ENDED
--------------------------------------------------------
SEPTEMBER 28, SEPTEMBER 30, OCTOBER 1,
1996 1995 1994
--------------------------------------------------------
(IN THOUSANDS, EXCEPT SHARE DATA)
Net sales $195,866 $199,413 $ 180,520
Cost of sales 152,884 159,245 139,754
General and administrative expenses 20,707 17,447 16,223
Goodwill amortization 1,857 1,857 1,721
Interest and amortization of debt costs 6,164 6,169 4,978
Write-down of fixed assets - 2,153 -
-----------------------------------------------------
181,612 186,871 162,676
-----------------------------------------------------
Income before income taxes 14,254 12,542 17,844
Federal and state income taxes 5,854 5,982 7,496
-----------------------------------------------------
Net income $ 8,400 $ 6,560 $ 10,348
=====================================================
Weighted average common and common
equivalent shares outstanding
13,643 14,196 14,010
=====================================================
Net income per share $ .62 $ .46 $ .74
=====================================================
See accompanying notes.
21
23
Dyersburg Corporation
Consolidated Statements of ShareholdersG Equity
ADDITIONAL SUBSCRIPTION
COMMON PAID-IN RETAINED NOTES
STOCK CAPITAL EARNINGS RECEIVABLE TOTAL
----------------------------------------------------------------------------
(IN THOUSANDS, EXCEPT SHARE DATA)
Balance at October 3, 1993 $136 $41,839 $23,516 $(330) $65,161
Net income 10,348 10,348
Cash dividends paid (561) (561)
($.04 per share)
Principal collections 330 330
on subscription notes
receivable
Issuance of 623,536 shares
of Common Stock in purchase 6 4,982 4,988
of United Knitting, Inc.
---------------------------------------------------------------------------
Balance at October 1, 1994 142 46,821 33,303 - 80,266
Net income 6,560 6,560
Cash dividends paid (568) (568)
($.04 per share)
---------------------------------------------------------------------------
Balance at September 30, 1995 142 46,821 39,295 - 86,258
Net income 8,400 8,400
Cash dividends paid (545) (545)
($.04 per share)
Acquisition and retirement
of 1,051,275 shares of common stock (10) (5,404) (5,414)
Exercise of stock options 43 43
---------------------------------------------------------------------------
Balance at September 28, 1996 $132 $41,460 $47,150 $ - $88,742
===========================================================================
See accompanying notes.
22
24
Dyersburg Corporation
Consolidated Statements of Cash Flows
YEAR ENDED
SEPTEMBER 28, SEPTEMBER 30, OCTOBER 1,
1996 1995 1994
-----------------------------------------------------
(IN THOUSANDS)
OPERATING ACTIVITIES
Net income $ 8,400 $ 6,560 $ 10,348
Adjustments:
Depreciation 9,573 10,001 8,630
Amortization 2,029 2,029 1,903
Write-down of fixed assets - 2,153 -
Deferred income taxes and other 554 (98) 787
Changes in operating assets and liabilities:
Accounts receivable (5,507) 6,087 (5,321)
Inventories (1,010) (1,601) (1,481)
Trade accounts payable and other current
liabilities (758) (1,604) 270
Other 288 (207) 98
-----------------------------------------------------
Net cash provided by operating activities
13,569 23,320 15,234
INVESTING ACTIVITIES
Purchases of property, plant and equipment
(11,778) (12,816) (14,278)
Purchase of United Knitting, Inc. - - (5,426)
Other 187 108 101
-----------------------------------------------------
Net cash used in investing activities (11,591) (12,708) (19,603)
FINANCING ACTIVITIES
Net borrowings (payments) on long-term
obligations 4,150 (9,400) 2,853
Dividends paid (545) (568) (561)
Exercise of stock options 43 - -
Acquisition of common stock (5,414) - -
Other (203) (230) 1,368
-----------------------------------------------------
Net cash provided by (used in) financing
activities (1,969) (10,198) 3,660
-----------------------------------------------------
Net increase (decrease) in cash 9 414 (709)
Cash at beginning of year 974 560 1,269
-----------------------------------------------------
Cash at end of year $ 983 $ 974 $ 560
=====================================================
See accompanying notes.
23
25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
Dyersburg Corporation and its wholly-owned subsidiaries (the Company). All
significant intercompany balances and transactions have been eliminated.
OPERATIONS
The Company is a textile manufacturer of knit fabrics with customers
concentrated in the domestic apparel industry. The Company does not require
collateral for accounts receivable and is partially insured on certain customer
balances. The level of insurance varies by customer based upon third party
credit ratings.
USE OF ESTIMATES
The preparation of the consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates and assumptions.
INTANGIBLE ASSETS
Goodwill, which consists of costs in excess of net assets acquired, is
amortized by the straight-line method over forty years. Deferred debt costs are
amortized by the interest method over the life of the related debt. Goodwill is
net of accumulated amortization of $15,193,000 and $13,336,000 and deferred
debt costs and other is net of accumulated amortization of $672,000 and
$500,000, at September 28, 1996 and September 30, 1995, respectively. The
carrying value of goodwill is reviewed if the facts and circumstances suggest
that it may be impaired. If this review indicated that goodwill was not
recoverable, as determined based on the estimated undiscounted cash flows of
the entity acquired over the remaining amortization period, the Company's
carrying value of the goodwill would be reduced by the estimated shortfall of
cash flows.
24
26
1. ACCOUNTING POLICIES (CONTINUED)
INVENTORIES
Cotton raw material inventory and the cotton component of work in process and
finished goods inventory are valued at the lower of average cost or market.
Other inventories are valued at the lower of cost (first-in, first-out method)
or market.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost. Depreciation is computed on
the straight-line basis over the estimated useful lives of the assets:
buildings - 25 years, machinery and equipment - 5 to 15 years.
INCOME TAXES
The Company has provided for income taxes under the liability method.
Accordingly, deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
STOCK BASED COMPENSATION
The Company grants stock options for a fixed number of shares to employees with
an exercise price equal to the fair value of the shares at the date of grant.
The Company accounts for stock option grants in accordance with APB Opinion No.
25, Accounting for Stock Issued to Employees, and accordingly, recognizes no
compensation expense for the stock option grants.
EARNINGS PER COMMON SHARE
Earnings per common share is computed using the weighted average number of
common shares outstanding during each period, including common stock
equivalents, consisting of stock options calculated using the treasury stock
method, when dilutive.
25
27
1. ACCOUNTING POLICIES (CONTINUED)
ACCOUNTING PRONOUNCEMENTS
In March 1995, the Financial Accounting Standards Board issued Statement No.
121, Accounting for the Impairment of Long- Lived Assets and for Long-Lived
Assets to Be Disposed Of, which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. Statement 121 also addresses the
accounting for long-lived assets that are expected to be disposed of. The
Company will adopt Statement 121 in the first quarter of 1997 and, based on
current circumstances, does not believe the effect of adoption will be
material. The write-down of fixed assets in 1995 would not have been materially
different had the Company adopted Statement 121.
RECLASSIFICATIONS
Certain amounts in the 1994 and 1995 financial statements have been
reclassified to conform with the 1996 financial statement presentation. Such
reclassifications had no effect on net income as previously reported.
2. INVENTORIES
Inventories consist of the following:
SEPTEMBER 28, SEPTEMBER 30,
1996 1995
----------------------------------
(IN THOUSANDS)
Raw materials $ 4,649 $4,947
Work in process 8,530 7,621
Finished goods 9,145 8,937
Supplies and other 924 733
----------------------------------
$23,248 $22,238
==================================
26
28
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consists of the following:
SEPTEMBER 28, SEPTEMBER 30,
1996 1995
------------------------------------
(IN THOUSANDS)
Land $ 673 $ 673
Buildings 32,612 24,198
Machinery and equipment 88,370 85,701
121,655 110,572
Less allowance for depreciation 53,897 44,738
----------------------------------
$ 67,758 $ 65,834
==================================
In 1995, the Company committed to replace certain spinning and drawing
machinery with leased equipment. Concurrently, the Company wrote down machinery
and equipment with original cost of $11,760,000 and accumulated depreciation of
$9,468,000. The write-down, less the proceeds from the sale of the assets,
resulted in a loss of $2,153,000.
4. LONG-TERM OBLIGATIONS
Long-term obligations consist of the following:
SEPTEMBER 28, SEPTEMBER 30,
1996 1995
---------------------------------
(IN THOUSANDS)
Revolving credit $48,050 $43,900
Industrial revenue bonds 7,900 7,900
Senior notes 25,000 25,000
------------------------------
$80,950 $76,800
==============================
27
29
4. LONG-TERM OBLIGATIONS (CONTINUED)
The Company has a revolving line of credit (the Revolver) with current
availability of $80,000,000, declining to $70,000,000 on April 1, 1997, and
maturing on July 16, 1998. Amounts outstanding under the Revolver bear interest
at variable rates (approximately 6.5% at September 28, 1996 and 6.9% at
September 30, 1995). In addition, the Company is required to pay a commitment
fee of 1/4% on the average unused portion of the Revolver and a letter of
credit fee of approximately 1% on average outstanding letters of credit.
Letters of credit outstanding under the Revolver are $8,122,000 at September
28, 1996 and September 30, 1995. The unused portion of the Revolver is
$23,828,000 at September 28, 1996. All amounts outstanding under the Revolver
are unsecured, except for the letters of credit which are secured by real
property and equipment with a carrying value of approximately $3,704,000 at
September 28, 1996. Pursuant to the terms of the Revolver, the Company is
required to maintain certain financial ratios, minimum shareholders' equity and
working capital levels.
The Industrial Revenue Bonds bear interest at adjustable rates (4.0% at
September 28, 1996 and 3.9% at September 30, 1995) and mature November 1, 2002.
The bonds are secured by a letter of credit of $8,057,000 issued under the
Revolver.
The Senior Notes bear interest at 6.78% and require annual principal payments
of $3,125,000 from 1998 to 2005. The Senior Note agreement requires the Company
to maintain certain financial ratios and limits the payment of dividends. At
September 28, 1996, the amount of retained earnings available for the payment
of dividends was approximately $12,306,000.
The schedule of debt maturities presented below assumes borrowings under the
Revolver are outstanding until maturity:
YEAR AMOUNT
---- ------
1997 $ -
1998 51,175
1999 3,125
2000 3,125
2001 3,125
Thereafter 20,400
----------
Total $ 80,950
==========
28
30
4. LONG-TERM OBLIGATIONS (CONTINUED)
Total interest paid was $5,930,000 in 1996, $5,777,000 in 1995 and $4,431,000
in 1994.
The Company has additional letters of credit outstanding of $2,066,000 for
workers' compensation insurance.
In 1995, the Company entered into two interest rate swap agreements to reduce
the impact of changes in interest rates on the Revolver. The two interest rate
swap agreements have a total notional principal amount of $20,000,000. The
differential paid or received is recognized as an adjustment to interest
expense. The Company agreed to make interest payments based on a fixed rate of
7.06% and 6.17% on $10,000,000 and $10,000,000 notional principal,
respectively, in exchange for payments based on a floating rate of three-month
LIBOR. The agreements terminate April 26, 2002 and June 9, 2002, respectively.
The fair values of the swap agreements are not recognized in the financial
statements.
The fair value of long-term obligations is estimated using discounted cash flow
analyses based on the CompanyGs current incremental borrowing rate. The
carrying value and fair value of long-term obligations at September 28, 1996,
is $80,950,000 and $79,483,000, respectively, and at September 30, 1995 was
$76,800,000 and $75,343,000, respectively. The fair value of the CompanyGs
interest rate swaps was based on pricing models and formulas using current
assumptions. The fair value of the CompanyGs interest rate swaps was $24,000
and $(312,000) at September 28, 1996 and September 30, 1995, respectively. For
all other financial instruments, the carrying amounts approximate fair value
due to their short maturities.
5. SHAREHOLDERSG EQUITY
The Company has 5,000,000 authorized shares of no par value preferred stock.
The preferences and rights of the Preferred Stock will be fixed at the
discretion of the Board of Directors upon issuance.
On October 4, 1995, the Company approved a plan to repurchase up to 2,000,000
shares of Dyersburg Corporation common stock. Purchases are made at the
discretion of the Company as warranted based on market pricing. As of September
28, 1996, a total of
29
31
5. SHAREHOLDERS' EQUITY (CONTINUED)
1,051,275 shares had been purchased under the repurchase plan at an aggregate
cost of approximately $5,414,000.
The Company's Stock Option Plans (the Option Plans) provide for the granting of
stock options to management, key employees and outside directors. Options are
subject to terms and conditions determined by the Compensation Committee of the
Board of Directors, and generally are exercisable in increments of 20% per year
beginning one year from date of grant and expire 10 years from date of grant.
Shares reserved for future grants under the Option Plans were approximately
277,000 and 143,000 at September 28, 1996 and September 30, 1995, respectively.
In 1996, the Company repriced certain stock options through the cancellation of
approximately 737,000 outstanding options and the simultaneous granting of
367,000 options at a reduced exercise price equal to market at the date of
repricing. Except for the repricing, no other terms of the stock options were
changed.
Information pertaining to the Option Plans summarized in the table below is in
thousands except per share amounts:
NUMBER OF SHARES
UNDER OPTION PRICE PER SHARE AGGREGATE PRICE
Balance at October 3, 1993 273 $6.75N$9.00 $2,376
Options granted 528 $6.625N$8.125 4,164
Options canceled (42) $8.25N$9.00 (351)
Balance at October 1, 1994 759 $6.625N$9.00 6,189
Options granted 2 $5.625 11
Options canceled (4) $6.00 (24)
Balance at September 30, 1995 757 $5.625N$9.00 6,176
Options granted 369 $4.50N4.625 1,663
Options exercised (10) $4.50 (43)
Options canceled (740) $4.50N$9.00 (6,038)
Balance at September 28, 1996 376 $4.50N$9.00 $1,758
At September 28, 1996, 250,829 of these options were exercisable.
30
32
6. PROFIT SHARING PLANS
The Company has two separate defined contribution plans that, collectively,
cover substantially all of its employees. Contributions to one plan equal 7.5%
of adjusted income, as defined, plus additional amounts which the Board of
Directors may authorize. Contributions to the other plan are at the discretion
of the Board of Directors. The contribution for either plan shall not exceed
the maximum amount deductible for federal income tax purposes. Profit- sharing
expense was $1,875,000, $1,902,000 and $2,171,000 for fiscal years 1996, 1995
and 1994, respectively.
7. INCOME TAXES
Deferred taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes.
Significant components of the Company's deferred tax liabilities and assets are
as follows:
SEPTEMBER 28, SEPTEMBER 30,
1996 1995
(IN THOUSANDS)
Deferred tax liabilities:
Depreciation $ 7,944 $ 8,105
Other 2,167 1,684
-------------------------------------------
Total deferred tax liabilities 10,111 9,789
Deferred tax assets 1,728 1,866
-------------------------------------------
Net deferred tax liabilities $ 8,383 $ 7,923
===========================================
Significant components of the provision for income taxes are as follows:
YEAR ENDED
------------------------------------------------------
SEPTEMBER 28, SEPTEMBER 30, OCTOBER 1,
1996 1995 1994
------------------------------------------------------
(IN THOUSANDS)
Current:
Federal $5,240 $5,570 $5,646
State 154 590 1,038
Deferred, federal 460 (178) 812
-----------------------------------------------------
$5,854 $5,982 $7,496
=====================================================
31
33
7. INCOME TAXES (CONTINUED)
The provision for income taxes differed from the amount computed by applying
the statutory federal income tax rate of 35% to income before income taxes due
to the following:
YEAR ENDED
----------------------------------------------------
SEPTEMBER 28, SEPTEMBER 30, OCTOBER 1,
1996 1995 1994
----------------------------------------------------
(IN THOUSANDS)
Computed federal tax expense at statutory
rate $4,989 $4,390 $6,245
State taxes, net of federal income tax
benefit 100 383 702
Effect of nondeductibility of amortization
of goodwill 650 650 602
Other 115 559 (53)
-----------------------------------------------
$5,854 $5,982 $7,496
===============================================
Income tax payments were $4,885,000, $5,996,000 and $7,853,000 for fiscal years
1996, 1995, and 1994, respectively.
8. ACCRUED EXPENSES
Accrued expenses consist of the following:
SEPTEMBER 28, SEPTEMBER 30,
1996 1995
------------------------------------
(IN THOUSANDS)
Accrued bonuses and commissions $1,473 $ 838
Workers' compensation 2,485 2,288
Other 2,742 2,550
------------------------------------
$6,700 $5,676
====================================
32
34
9. LEASES
The Company leases certain equipment and office space under noncancelable
operating leases. Most of these leases include renewal options and some
include purchase options. Rent expense was $3,050,000 in 1996, $2,089,000 in
1995 and $1,930,000 in 1994.
Future minimum payments under these leases are as follows at September 28,
1996: $3,212,000 in 1997, $2,978,000 in 1998, $3,004,000 in 1999, $2,398,000 in
2000, $1,906,000 in 2001 and $5,080,000 thereafter. Total aggregate future
minimum lease payments are $18,578,000.
10. PURCHASE OF UNITED KNITTING, INC.
On January 19, 1994, the Company acquired all of the outstanding capital stock
of United Knitting, Inc. for $5,426,000 in cash and approximately $5,000,000 of
common stock (623,536 shares) in a transaction accounted for under the purchase
method. Goodwill resulting from the transaction was approximately $16,800,000.
United Knitting, Inc. is a textile manufacturer which produces stretch fabrics.
On a pro forma basis, net sales, net income and net income per share would have
been $192,691,000, $10,437,000, and $0.74, respectively, for the year ended
October 1,1994, assuming the acquisition occurred at the beginning of such
fiscal year.
33
35
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
DYERSBURG CORPORATION
- ----------------------------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
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Additions
Description Balance at Charged to Charged to Other Deductions-- Balance at
Beginning of Costs and Accounts- describe End of
Period Expenses Describe Period
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YEAR ENDED SEPTEMBER 28, 1996
Allowance for doubtful accounts $1,170 $1,057 $727(1) $1,500
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YEAR ENDED SEPTEMBER 30, 1995
Allowance for doubtful accounts $1,000 $ 558 $388(1) $1,170
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YEAR ENDED OCTOBER 1, 1994
Allowance for doubtful accounts $ 775 $ 390 $150(2) $315(1) $1,000
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1) Write-offs, net of recoveries.
2) Allowance for doubtful accounts of United Knitting, Inc. at acquisition_
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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
Information with respect to directors of the Company is included in the
Company's definitive Proxy Statement for the Annual Meeting of Shareholders to
be held January 22, 1997, (the "Proxy Statement") under the caption "Proposal
One: Election of Class II Directors," which information is herein incorporated
by reference.
Pursuant to General Instruction G(3), information concerning executive officers
of the Company is included in Part I of this Form 10-K under the caption
"Executive Officers of the Registrant."
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to the executive compensation is included in the Proxy
Statement under the caption "Executive Compensation," which information is
herein incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
Information with respect to the security ownership of certain beneficial owners
and management is included in the Proxy Statement under the caption "Security
Ownership of Management and Certain Beneficial Owners," which information is
herein incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a)(1) Financial Statements. See Item 8.
(a)(2) Supplemental Schedules Supporting Financial
Statements. See Item 8.
(a)(3) Exhibits. See Index to Exhibits, page 37.
(b) Reports on Form 8-K. None
(c) Exhibits. See Index to Exhibits, page 37.
(d) Financial Statement Schedules. See Item 8.
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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 duly authorized.
DYERSBURG CORPORATION
Date: December 16, 1996 /s/ T. Eugene McBride
-----------------------------
T. Eugene McBride
President and
Chief Executive Officer
(Principal executive officer)
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the
Registrant and in the capacities indicated on December 16, 1996.
/s/ T. Eugene McBride /s/ John D. Howard
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T. Eugene McBride John D. Howard
Director Director
/s/ Jerome M. Wiggins /s/ Julius Koppelman
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Jerome M. Wiggins Julius Koppelman
President - Operations Director
Director
/s/ Wm. S. Shropshire, Jr. /s/ Daniel W. Miller
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William S. Shropshire, Jr. Daniel W. Miller
Executive Vice President, Director
Chief Financial Officer and
Secretary-Treasurer
(Principal financial officer)
/s/ Paul L. Hallock /s/ Marvin B. Crow
- ------------------------------- -------------------------------
Paul L. Hallock Marvin B. Crow
Vice President - Finance Director
(Principal accounting officer)
/s/ James E. Herring /s/ L.R. Jalenak, Jr.
- ------------------------------- -------------------------------
James E. Herring L. R. Jalenak, Jr.
Director Director
/s/ Patricia Hilsberg /s/ Julius Lasnick
- ------------------------------- -------------------------------
Patricia Hilsberg Julius Lasnick
Director Director
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INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
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2 Stock Purchase Agreement, dated as of January 19,
1994, including certain exhibits,
relating the acquisition of the
outstanding capital stock of United
Knitting Acquisition Corp. (incorporated
by reference to Exhibit 2 to the Current
Report on Form 8-K filed with the
Securities and Exchange Commission
on February 2, 1994).
3.1 Amended and Restated Charter of Dyersburg
Corporation (incorporated by reference
to Exhibit 3(a) to the Registration
Statement on Form S-1 (Registration No.
33-46331)).
3.2 Bylaws of Dyersburg Corporation (incorporated
by reference to Exhibit 3(b) to the
Registration Statement on Form S-1
(Registration No. 33-46331)).
10.4 Amended and Restated Reducing Revolving Credit
Agreement, including form of Amended and
Restated Revolving Credit Note, dated as
of July 16, 1993 among Dyersburg Fabrics I
Inc., Dyersburg Corporation and Trust
Company Bank, as agent, and
certain banks named therein (incorporated
by reference to Exhibit 10.4 to Dyersburg
Corporation's Form 10-K for the fiscal
year ended October 2, 1993).
10.5 Note Purchase Agreement, including form of
Note, dated as of September 29, 1993
between Dyersburg Corporation and
Dyersburg Fabrics Inc. and each of several
purchasers relating to the sale of
$25,000,000 of Dyersburg
Fabrics Inc.'s 6.78% Senior Notes Due 2005
(incorporated by reference to Exhibit 10.5
to Dyersburg Corporation's Form 10-K for
the fiscal year ended October 2, 1993).
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INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- ---------------------------------------------
10.6 Loan Agreement between The Industrial Revenue
Board of the City of Trenton, Tennessee
and Dyersburg Fabrics Inc. dated as of
July 1, 1990 (incorporated by reference to
Dyersburg Fabrics Inc.'s Form 10-K for the
fiscal year ended September 29, 1990).
10.7 Tax Sharing Agreement dated July 24, 1990
between Dyersburg Fabrics Inc. and
Dyersburg Corporation (incorporated by
reference to Dyersburg Fabrics Inc.'s Form
10-K for the fiscal year ended September
29, 1990).
10.8 Amended and Restated Letter of Credit Agreement
dated as of July 1, 1990 and executed on May 14,
1992, by and among Dyersburg Fabrics Inc.,
Dyersburg Corporation, and Trust Company Bank
relating to the $7,900,000 Industrial Development
Bond of the City of Trenton,
Tennessee Industrial Development Bonds
(Dyersburg Fabrics Inc. Project), Series
1990 (incorporated by reference to
Dyersburg Corporation's Form 10-K for
fiscal year ended October 3, 1992).
10.9 First Amendment to Amended and Restated
Letter of Credit Agreement dated November
30, 1992 by and among Dyersburg Fabrics
Inc., Dyersburg Corporation and Trust
Company Bank (incorporated by reference to
Dyersburg Corporation's Form 10-K for the
fiscal year ended October 2, 1992).
10.10 Second amendment to Amended and Restated
Letter of Credit Agreement dated October
29, 1993 by and among Dyersburg Fabrics
Inc., Dyersburg Corporation and Trust
Company Bank, (incorporated by reference
to Dyersburg Corporation's Form 10-K for
the fiscal year ended October 2, 1993).
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INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- ---------------------------------------------------
10.11 Amended and Restated Working Capital Agreement
dated as of May 14, 1992, by and among
Dyersburg Fabrics Inc., Dyersburg Corporation,
and Trust Company Bank (incorporated by
reference to Dyersburg Corporation's Form 10-K
for the fiscal year ended October 3, 1992).
10.12 First Amendment to Amended and Restated
Working Capital Agreement dated as of
November 30, 1992 among Dyersburg Fabrics
Inc., Dyersburg Corporation and Trust
Company Bank (incorporated by reference to
Exhibit 10.12 to Dyersburg Corporation's
Form 10-K for the fiscal year ended
October 2, 1993).
10.13 Second Amendment to amended and Restated
Working Capital Agreement dated as of
October 29, 1993 among Dyersburg Fabrics,
Inc., Dyersburg Corporation and Trust
Company Bank (incorporated by reference to
Exhibit 10.13 to Dyersburg Corporation's
Form 10-K for the fiscal year ended
October 2, 1993).
10.14 Amended and Restated Guaranty of Dyersburg
Corporation in favor of Trust Company Bank
and certain banks named therein dated as
of July 16, 1993 (incorporated by
reference to Exhibit 10.14 to Dyersburg
Corporation's Form 10-K for the fiscal
year ended October 2, 1993).
10.15 Assignment of and Amendment and Restatement
of Security Agreement dated as of May 14,
1992 by and among Dyersburg Fabrics Inc.,
Trust Company Bank, as agent, and other
banks named therein (incorporated by
reference to Dyersburg Corporation's Form
10-K for the fiscal year ended October 3,
1992).
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INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
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10.16 Assignment of and Amendment and Restatement
of Tennessee Deed of Trust and Security
Agreement dated May 14, 1992 by and among
Dyersburg Fabrics Inc. and Trust Company
Bank (incorporated by reference to
Dyersburg Corporation's Form 10-K for the
fiscal year ended October 3, 1992).
10.17* Dyersburg Corporation 1992 Stock Incentive
Plan (incorporated by reference to Exhibit
10(a).2 to the Registration Statement on
Form S-1 (Registration No. 33-46331)), as
amended, (incorporated by reference to
Appendix A to Proxy Statement dated
December 14, 1995).
10.18* Dyersburg Fabrics Inc. Deferred Compensation
Plan, as amended, (incorporated by reference
to Appendix A to Proxy Statement dated
December 14, 1995).
10.19 Form of Purchase Agreement dated March 4, 1992
between the Company and each of the
holders of the Junior Term Notes
(incorporated by reference to Exhibit
10(j) to the Registration Statement on
Form S-1 (Registration No. 33-46331)).
10.20 Form of Registration Rights Agreement dated as
of April 30, 1992 between the Company and
each shareholder of the Company
(incorporated by reference to Exhibit
10(k) to the Registration Statement on
Form S-1 (Registration No. 33-46331)).
10.21* Dyersburg Corporation Non-qualified Stock Option
Plan for Employees of Acquired Companies
(incorporated by reference to Exhibit 4(c)
to the Registration Statement on Form S-8
(Registration No. 33-74350)), as amended,
(incorporated by reference to Appendix A
to Proxy Statement dated December 14,
1995).
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INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
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10.22 Amended and Restated First Amendment to Amended
and Restated Reducing Revolving Credit
Agreement, dated as of January 13, 1994
(incorporated by reference to Exhibit 10.1
to the Quarterly Report on Form 10-Q for
the quarter ended January 1, 1994).
10.23 Seasonal Working Capital Agreement, dated as of
January 1, 1994, by and among Dyersburg Fabrics Inc.,
Trust Company Bank, and Dyersburg Corporation
(incorporated by reference to Exhibit 10.2 to the
Quarterly Report on Form 10-Q for the quarter ended
January 1, 1994).
10.24 Supplement to Amended and Restated Guaranty
Agreement, dated as of January 1, 1994,
made by Dyersburg Corporation in favor of
Trust Company Bank (incorporated by
reference to Exhibit 10.3 to the Quarterly
Report on Form 10-Q for the quarter ended
January 1, 1994).
10.25 Second Amended and Restated Reducing Revolving
Credit Agreement, dated as of April 10, 1996, by
and among Dyersburg Corporation, Dyersburg
Fabrics Inc., DFIC, Inc., Dyersburg Fabrics
Limited Partnership, I, SunTrust Bank, Atlanta, as
agent, and certain other financial institutions named
therein (incorporated by reference to Exhibit 10.1 to
Dyersburg Corporation's Form 10-Q for the quarter
ended March 30, 1996).
10.26 Second Amended and Restated Revolving Credit
Note of Dyersburg Fabrics Limited Partnership, I,
dated as of April 10, 1996, payable to SunTrust
Bank, Atlanta, in the principal sum of $26,400,000
(incorporated by reference to Exhibit 10.2 to
Dyersburg Corporation's Form 10-Q for the quarter
ended March 30, 1996).
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INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
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10.27 Second Amended and Restated Revolving Credit
Note of Dyersburg Fabrics Limited Partnership, I,
dated as of April 10, 1996, payable to NBD Bank,
in the principal sum of $18,000,000 (incorporated
by reference to Exhibit 10.3 to Dyersburg
Corporation's Form 10-Q for the quarter ended
March 30, 1996).
10.28 Second Amended and Restated Revolving Credit
Note of Dyersburg Fabrics Limited Partnership, I,
dated as of April 10, 1996, payable to National City
Bank, Kentucky, in the principal sum of
$15,200,000 (incorporated by reference to
Exhibit 10.4 to Dyersburg Corporation's Form
10-Q for the quarter ended March 30, 1996).
10.29 Second Amended and Restated Revolving Credit
Note of Dyersburg Fabrics Limited Partnership, I,
dated as of April 10, 1996, payable to The Bank of
Tokyo-Mitsubishi, Ltd., Atlanta Agency, in the
principal sum of $15,200,000 (incorporated by
reference to Exhibit 10.5 to Dyersburg Corporation's
Form 10-Q for the quarter ended March 30, 1996).
10.30 Seconded Amended and Restated Revolving Credit
Note of Dyersburg Fabrics Limited Partnership, I,
dated as of April 10, 1996, payable to Wachovia
Bank of Georgia, N.A., in the principal sum of
$5,200,000 (incorporated by reference to Exhibit
10.6 to Dyersburg Corporation's Form 10-Q for the
quarter ended March 30, 1996).
10.31 Second Amended and Restated Guaranty Agreement,
dated as of April 10, 1996, by Dyersburg Corporation,
Dyersburg Fabrics Inc. and DFIC, Inc. in favor of
SunTrust Bank, Atlanta, as agent, and certain
other financial institutions named therein
(incorporated by reference to Exhibit 10.7 to
Dyersburg Corporation's Form 10-Q for the quarter
ended March 30, 1996).
10.32 Amended and Restated Affiliate Guaranty Agreement, dated
as of April 10, 1996, by United Knitting, Inc., United
Knitting Limited Partnership, I, and UKIC, Inc. in favor
of SunTrust Bank, Atlanta, as agent, and certain other
financial institutions named therein (incorporated by
reference to Exhibit 10.8 to Dyersburg Corporation's
Form 10-Q for the quarter ended March 30, 1996).
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INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- ---------------------------------------------------
10.33 Second Amended and Restated Working Capital
Agreement, dated as of April 10, 1996, by and
among Dyersburg Fabrics Limited Partnership, I,
Dyersburg Corporation, Dyersburg Fabrics, Inc.,
DFIC, Inc. and SunTrust Bank, Atlanta
(incorporated by reference to Exhibit 10-9 to
Dyersburg Corporation's Form 10-Q for the quarter
ended March 30, 1996).
10.34 Amended and Restated Working Capital Note of
Dyersburg Fabrics Limited Partnership, I, dated as
of April 10, 1996, in favor of SunTrust Bank, Atlanta,
in the principal sum of $1,000,000 (incorporated by
reference to Exhibit 10.10 to Dyersburg Corporation's
Form 10-Q for the quarter ended March 30, 1996).
10.35 Second Amended and Restated Letter of Credit
Agreement dated as of July 1, 1990, among
Dyersburg Fabrics Limited Partnership, I,
Dyersburg Fabrics Inc., Dyersburg Corporation,
DFIC, Inc., and SunTrust Bank, Atlanta, relating
to $7,900,000 The Industrial Development Board of
the City of Trenton, Tennessee Industrial Development
Revenue Bonds (Dyersburg Fabrics Inc. Project Series
1990)(incorporated by reference to Exhibit 10.11
to Dyersburg Corporation's Form 10-Q for the
quarter ended March 30, 1996).
10.36 Amended and Restated Pledge and Security Agreement,
dated as of July 1, 1990, made by, Dyersburg
Fabrics Limited Partnership, I, to
SunTrust Bank, Atlanta (incorporated by
reference to Exhibit 10.12 to Dyersburg
Corporation's Form 10-Q for the quarter
ended March 30, 1996).
10.37 First Amendment to Amended and Restated
Tennessee Deed of Trust and Security
Agreement, dated as of April 10, 1996, by and
among Dyersburg Fabrics Inc., Dyersburg
Fabrics Limited Partnership, I, and
SunTrust Bank, Atlanta (incorporated by
reference to Exhibit 10.13 to Dyersburg
Corporation's Form 10-Q for the quarter
ended March 30, 1996).
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INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- ---------------------------------------------------
10.38 Seconded Amended and Restated Security Agreement,
dated as of April 10, 1996, by and between
Dyersburg Fabrics Limited Partnership, I,
and SunTrust Bank, Atlanta (incorporated by
reference to Exhibit 10.14 to Dyersburg
Corporation's Form 10-Q for the quarter
ended March 30, 1996).
10.39 First Amendment, Limited Waiver and Consent,
dated as of April 10. 1996, by and among
Dyersburg Corporation, Dyersburg Fabrics Inc.,
Dyersburg Fabrics Limited Partnership, I, The
Equitable Life Assurance Society of the
United States, Equity Variable Life Insurance
Company, Public Employees Retirement
Association of Colorado, Northern Life Insurance
Company, and Bankers Security Life Insurance
Society (incorporated by reference to
Exhibit 10.15 to Dyersburg Corporation's
Form 10-Q for the quarter ended March 30, 1996).
10.40 Guaranty by Dyersburg Corporation of those certain
6.78% Senior Notes Dye 2005 in the aggregate
principal amount of $25,000,000 originally issued
by Dyersburg Fabrics Inc. (incorporated by reference
to Exhibit 10.16 to Dyersburg Corporation's Form
10-Q for the quarter ended March 30, 1996).
10.41 Guaranty by Dyersburg Fabrics Inc. of those certain
6.78% Senior Notes Due 2005 in the aggregate
principal amount of $25,000,000 originally
issued by Dyersburg Fabrics Inc. (incorporated
by reference to Exhibit 10.17 to Dyersburg
Corporation's Form 10-Q for the quarter ended
March 30, 1996).
10.42 Guaranty by DFIC, Inc. of those certain 6.78%
Senior Notes Due 2005 kin the aggregate principal
amount of $25,000,000 originally issued by
Dyersburg Fabrics Inc. (incorporated by reference
to Exhibit 10.18 to Dyersburg Corporation's Form
10-Q for the quarter ended March 30, 1996).
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INDEX TO EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- ---------------------------------------------------
10.43 Guaranty by United Knitting Limited Partnership, I,
of those certain 6.78% Senior Notes Due 2005 in the
aggregate principal amount of $25,000,000 originally
issued by Dyersburg Fabrics Inc. of those certain
6.78% Senior Notes Due 2005 in the aggregate
principal amount of $25,000,000 originally issued
by Dyersburg Fabrics Inc. (incorporated by reference
to Exhibit 10.19 to Dyersburg Corporation's Form
10-Q for the quarter ended March 30, 1996).
10.44 Guaranty by UKIC, Inc. of those certain 6.78% Senior
Notes Due 2005 in the aggregate principal amount of
25,000,000 originally issued by Dyersburg Fabrics Inc.
(incorporated by reference to Exhibit 10.20 to Dyersburg
Corporation's Form 10-Q for the quarter ended March 30,
1996).
10.45 First Amendment to Second Amended and Restated
Reducing Revolving Credit Agreement (incorporated
by reference to Exhibit 10.2 to Dyersburg
Corporation's Form 10-Q for the quarter ended
June 29, 1996).
10.46 Second Amendment to Second Amended and Restated Reducing
Revolving Credit Agreement dated as of September 25, 1996,
by and among Dyersburg Corporation, Dyersburg Fabrics Inc.,
DFIC, Inc., Dyersburg Fabrics Limited Partnership, I,
SunTrust Bank, Atlanta, as agent, and certain other
financial institutions named therein.
10.47 Limited Waiver and Consent dated as of September 26, 1996,
by and among Dyersburg Corporation, Dyersburg Fabrics Inc.,
Dyersburg Fabrics Limited Partnership, I. The Equitable
Life Assurance Society of the United States, Equitable
Variable Life Insurance Company, Public Employees Retirement
Association of Colorado, Northern Life Insurance Company and
Reliastar Bankers Security Life Insurance Company.
11 Computation of earnings per share.
21 Subsidiaries
23 Consent of Independent Auditors
27 Financial Data Schedule (for SEC use only)
*Compensatory Plan.
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