UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
[FEE REQUIRED]
For the fiscal year ended January 3, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-8016
TULTEX CORPORATION
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(Exact name of registrant as specified in its charter)
Virginia 54-0367896
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
101 Commonwealth Boulevard, P. O. Box 5191, Martinsville, Virginia 24115
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 540-632-2961
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of exchange on which registered
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Common Stock, $1 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K [ ]
State the aggregate market value of the voting stock held by non-affiliates of
the registrant:
$108,333,049 at March 10, 1998.
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(APPLICABLE TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
29,875,488 shares of Common Stock, $1 par value, as of March 10, 1998
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DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K into which the document is incorporated:
1. Those portions of the Annual Report to Stockholders for the fiscal year
ended January 3, 1998 ("1997 Annual Report to Stockholders") incorporated herein
by reference in Part II, Items 5, 6, 7 and 8; and Part IV, Item 14.
2. Those portions of the Proxy Statement for the company's 1998 Annual
Meeting of Stockholders ("1998 Proxy Statement") incorporated herein by
reference in Part III, Items 10, 11, 12 and 13.
Page 1
Item 1. Business
General
Tultex Corporation is a marketer and manufacturer of activewear and licensed
sports apparel for consumers and sports enthusiasts. The company's diverse
product line includes fleeced sweats, jersey products (outerwear T-shirts), and
decorated jackets and caps. These products are sold under the company's own
brands led by the Discus Athletic and LogoAthletic premium labels and under
private labels, including Nike, Reebok and Pro Spirit. In addition, the company
has numerous professional and college sports licenses to manufacture and market
embroidered and screen-printed products with team logos and designs under its
LogoAthletic, Logo 7 and TrackGear brands. The company is a licensee of
professional sports apparel, holding licenses from the National Football League
("NFL"), Major League Baseball ("MLB"), the National Basketball Association
("NBA"), the National Hockey League("NHL") and the National Association for
Stock Car Auto Racing ("NASCAR") to manufacture a full range of sports apparel
for adults and children.
During fiscal 1997, the company experienced a net loss (including a
non-recurring charge) of $4,848,000, or $0.19 cents per share, compared with net
income of $15,699,000, or $0.53 per share, in fiscal 1996. The 1997 loss
followed disappointing holiday sales at retail in the company's categories of
products. Retail demand for undecorated fleece products and licensed headwear
and jackets slowed in the Thanksgiving / Christmas period, and replenishment
orders did not materialize as anticipated. To a lesser extent, the company
experienced competitive price pressures on its jersey products in the fourth
quarter. Earlier in the year, the company's performance was negatively affected
by bottlenecks in manufacturing and distribution processes, which caused delays
in shipments as well as higher production costs at domestic and non-US
facilities. In the fourth quarter, the company incurred a pretax charge of
$9,120,000 which equates to $5,563,000, or $0.19 per share, on an after-tax
basis. The charge resulted from initiatives undertaken by the company to improve
its future cost structure which had a negative impact on operating results in
1997. These initiatives included the following:
o bringing major capital projects on-line to improve textile manufacturing
efficiencies and yields;
o closing two domestic sewing plants in order to further shift sewing
production to non-US locations where costs are lower;
o closing two distributor warehouses and a sales office, and reducing staff
as the company streamlines its activewear operations.
Historically, Tultex has been a producer of quality fleece products for sale to
distributors and resale to consumers under private labels. However, in the
1980's, the activewear industry began to change. Increasing consumer demand
reflecting more active and casual lifestyles and the industry's historically
good long-term growth prospects and low fashion risk as compared to other
apparel products, attracted large, well-financed companies which acquired
competitors of the company. During the 1990s, merchandise retailers began to
exert pressure on margins for lower-priced fleece products as well as requiring
more complex distribution services in a compressed shipping season.
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In recent years, Tultex has pursued a strategy to enhance its competitiveness
and to capitalize on growth opportunities by becoming a consumer-oriented
apparel maker able to compete in a changing industry. This strategy includes the
following elements:
Higher-Margin Products. The company seeks to strengthen its
competitiveness through (i) the development of branded and private
label, higher-quality and higher-margin products to supplement its
traditionally strong position in the lower-priced segment of the
business and (ii) since 1991, the manufacture of jersey products. The
company has developed its own brands, promoting Discus Athletic and Logo
Athletic for its premium products and using the Tultex and Logo 7 labels
for the value-oriented and wholesale segments of the market. Discus
Athletic's highly visible advertising during televised broadcasts of
college football and basketball on the ESPN and ABC television networks
and sports marketing sponsorships, such as Pro Beach Men's and Women's
Volleyball, have contributed to a significant increase in sales of this
brand since 1992. In addition, Tultex has partnering arrangements to
supply higher-quality, private label products to companies such as
Reebok and Nike, none of which accounted for more than 10% of the
company's consolidated sales during 1997. Sales of the higher-margin
branded and premium private label products has grown from 13.8% of
consolidated sales in 1993 to 37.7% in 1996. As a result of the
disappointing retail selling season in late 1997, this percentage
declined to 30.9% in 1997.
Licensed Apparel Business to Complement Activewear Business. Tultex's
1992 acquisitions of Logo 7, a marketer of licensed sports apparel, and
Universal Industries, Inc. ("Logo Athletic/Headwear"), a marketer of
sports licensed headwear, enabled the company to achieve the fourth
largest market share (11.4%) in the higher-margin licensed apparel
business in 1996. The company estimated that it held the third largest
market share in this business in 1995. In addition, these acquisitions
have created opportunities for significant manufacturing and
distribution synergies with the company's activewear business. The
promotion of the LogoAthletic brand of licensed apparel through
television and print advertising, as well as promotional arrangements
featuring Dallas Cowboys' Troy Aikman, Miami Dolphins' Dan Marino,
Denver Broncos' John Elway, Kansas City Chiefs' Marcus Allen, and the
Buffalo Bills' Bruce Smith, among others, has helped to increase the
visibility and sales of LogoAthletic products.
Customer Relationships. Tultex actively pursues relationships with
department, sporting goods and other specialty stores, such as Sears, JC
Penney, Modell's, Dillard's, Foot Locker, Champs and Sports Authority,
to distribute its higher-margin branded and private label products. In
addition, the company continues to supply high volume retailers such as
Wal-Mart, Kmart and Target with private label, Tultex and Logo 7
products. The company believes that it provides customers with
exceptional service and support. Its distribution capabilities are
responsive to customers' changing delivery and inventory management
requirements. The company also has cut part inventory programs with
several customers which has improved lead times on certain customer
product requirements.
Emphasis on Wholesale Distribution. In 1997, Tultex continued its
emphasis on distribution channels, by acquiring California Shirt Sales,
Inc., Fullerton, California, a major jerseywear distributor in the
western U.S. and T-Shirt City, Cincinnati, Ohio, a major distributor of
jerseywear in the midwest. In March 1998, T-Shirt City opened a
distributor warehouse in Charlotte, North
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Carolina. This warehouse expanded the company's distributor one day
delivery service to include the southeastern United States. These
acquisitions complement the company's strategy to become more vertically
integrated from the manufacture of fleece and jerseywear to distributing
consumer products at wholesale to retailers.
Vertical Integration. The company's activewear business is vertically
integrated, spinning approximately 80-85% of the yarn it requires in
three yarn plants located in North Carolina (the balance is purchased
under yarn supply contracts) and knitting, dyeing and cutting fabric and
sewing finished goods in six plants in Virginia and North Carolina, one
plant in Jamaica and one plant in Mexico. The company's licensed sports
operations are conducted from one plant in Indiana, one plant in
Massachusetts, and one plant in North Carolina.
Industry
The company produces activewear and licensed sports apparel and headwear for
sale at a broad range of price points through all major distribution channels.
Activewear
The company's activewear business consists of its fleecewear and jersey
products. All activewear industry and market share data included herein has been
estimated by the company based on data provided by NPD American Shopper Panel, a
leading provider of market information on the textile industry.
Fleecewear. The fleecewear industry had retail sales of approximately $7.5
billion in 1997. The predominant fleecewear products are sweatshirts and
sweatpants.
The basic fleecewear industry is characterized by:
o low fashion risk - although fashion detailing changes often, basic garment
styles are not driven by trends or fads;
o overall stability - despite cyclical fluctuations, annual industry sales
volume is estimated at approximately 700 million units for 1994 through
1997;
o entry by well-financed acquirors - new entrants have been attracted by the
industry's long-term growth and have been able to make large initial
capital investments for manufacturing;
o barriers to entry - barriers include large required capital investments,
growing importance of brand-name recognition and established customer
relationships; and
o low threat of imports - the low labor portion of the cost of manufacturing
fleecewear and the short delivery times required for inventory control by
retail customers reduce the threat of competition from imports.
Fleecewear products have registered significant improvements in fabric weights,
blends, quality of
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construction, size, style, and color availability over the past few years. In
particular, garments are sized larger and typically use heavier, more
shrink-resistant fabrics. In addition, acrylic-dominant blends have been
supplanted by polyester-dominant and cotton-dominant blends. Despite these
upgrades in product specifications, retail prices have remained relatively flat
in real terms due to improvements in manufacturing technology and competitive
pressures.
Fleecewear exhibits a marked seasonality. For example, over the past three
fiscal years, an average of 70.2% of the company's fleecewear unit sales have
occurred in the third and fourth quarters.
Jersey (Outerwear T-shirts). Unit retail sales of jersey products have grown
25.7% from 1994 to 1997 and in 1997 totaled $11.4 billion, or 1,227 million
units. Like fleecewear, the industry characteristics of jersey apparel include
low fashion risk and long-term growth. Imports are a greater threat as the
weight/labor ratio and the freight costs involved are lower for jersey products
than for fleecewear; however, the ability to produce large volumes with short
delivery times gives domestic manufacturers an advantage over import competition
in both fleecewear and jersey apparel.
Industry Makeup and Retail Channels. Both the fleecewear and jerseywear
industries are fragmented with no one manufacturer accounting for a significant
portion of industry sales. In 1997, the five largest fleece manufacturers
together accounted for an estimated 25.4% of the branded market in the
fleecewear industry, with Sara Lee Corporation, Russell Corporation,
Fruit-of-the-Loom, VF Corporation and Tultex accounting for approximately 8.0%,
6.8%, 4.6%, 3.1%, and 2.9% of the wholesale industry sales, respectively. In
1997, the 5 largest jersey manufacturers together accounted for an estimated
11.7% of the branded market in the jersey industry, with Sara Lee Corporation,
Fruit-of-the-Loom, Russell Corporation, VF Corporation and Tultex accounting for
approximately 3.9%, 3.6%, 1.5%, 1.4% and 1.3% of wholesale industry sales,
respectively. The activewear industry has been characterized since the 1980s by
acquisition of existing competitors by larger companies with substantial
financial resources and manufacturing and distribution capabilities. These
factors and the resulting price reductions and inventory build-ups have
adversely affected participants in the activewear industry, including Tultex,
particularly with respect to the fleecewear industry. Fleecewear is distributed
through department stores, chain stores and sporting goods stores, although mass
merchandisers, wholesale clubs, and other discount retailers represent a
dominant and growing percentage of the total fleecewear market.
Competitive Factors. The company believes that price and quality are the primary
factors in consumer purchasing decisions. Brand name is often a proxy for
quality; as a result, those companies with brand name recognition enjoy
increased sales from this competitive advantage. Management believes that the
market share of foreign competitors in the fleecewear and jersey industries is
not significant.
Licensed Apparel
Estimated wholesale sales of professional sports licensed apparel (including
headwear) for 1996 were approximately $2.4 billion, according to Sports Style
Magazine, an industry publication. In general, the company believes that the
prospects for its continued growth in this market are good, although growth is
expected to be less rapid than in recent years due to increased competition. The
continually changing fortunes of existing teams, together with the introduction
of new franchises, has made the market extremely
Page 5
dynamic, as interest in each team fluctuates with its performance.
Manufacturers, such as the company, with the capacity to respond quickly to
these changes with new products and designs enjoy a competitive advantage over
smaller competitors.
Industry Makeup and Retail Channels. The industry has expanded rapidly over the
past five years, with the professional sports leagues granting large numbers of
licenses. With this proliferation of licenses, individual competitor's sales
growth slowed, though the top companies continued to gain market share.
According to Sports Style Magazine, the top five companies accounted for
approximately 68.1% of the market, with Starter Corporation, VF Corporation,
Sara Lee Corporation, Tultex and Fruit-of-the-Loom accounting for approximately
17.9%, 15.5%, 12.0%, 11.4% and 11.3% of the wholesale industry sales in 1996,
respectively. Imports of finished goods purchased by retailers directly or
through import companies do not represent a significant factor in the industry
as a whole, since there are no foreign licenses. However, all of the larger
domestic companies competing in the market do use significant off-shore sourcing
of finished outerwear goods. Licensed apparel products are generally sold
through the same retail channels as activewear.
Competitive Factors. There are significant barriers to entering the licensed
sports apparel industry and expanding such a business to significant size. After
expanding the number of licenses rapidly in recent years, the licensing
associations have begun to consolidate their relationships with existing
manufacturers and appear less likely to enter into licensing agreements with new
entrants. New entrants would be required to devote considerable resources to
developing their product mix and sales and distribution capabilities to compete
effectively.
Company Products
Activewear ($441.3 million or 67.8% of 1997 consolidated sales)
The principal activewear products of the company are fleeced knitwear items such
as sweatshirts, jogging suits, hooded jackets, headwear and jersey apparel for
work and casual wear. The company manufactures apparel products principally
under the Discus Athletic and Tultex brands. Products carrying the Discus
Athletic name are marketed for sale to chains such as Foot Locker, department
stores such as Sears and sporting goods stores, while Tultex products are
marketed for sale to mass merchandisers such as Wal-Mart and wholesale clubs
such as Sam's. The company also manufactures private-label products for sale
under many labels, including Nike, Reebok and Pro Spirit.
Licensed Apparel and Headwear ($209.3 million or 32.2% of 1997 consolidated
sales)
The company's licensed apparel products include jackets, sweats, T-shirts,
baseball-style caps and other headwear, embroidered or imprinted with
professional and college sports and entertainment-related licensed designs and
logos. These products are marketed under the LogoAthletic, Logo 7 and Track Gear
brands. Under the Logo Athletic name, the company offers premium-quality
jackets, caps and other activewear, including NFL "Pro-Line" authentic sideline
gear and NBA "Authentics" apparel. Tultex, through Logo 7, acquired Pro-Line
status from the NFL in 1993, a flagship program entitling the company to sell
products identical to those worn on the sidelines by NFL players and coaches.
Under the terms of the non-
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exclusive Pro-Line contract, the company markets Pro-Line products at retail for
all 30 NFL teams. The company's NFL Pro-Line and NBA Authentics products
prominently feature the LogoAthletic name and trademark, which the company
believes are key elements in developing the LogoAthletic brand. Under the Logo 7
brand, the company offers moderately-priced outerwear, fleecewear, T-shirts and
caps with licensed designs and logos. The company also sells popularly-priced
licensed fleecewear, jersey apparel and headwear. Under the Track Gear brand,
the company offers items such as t-shirts, sweatshirts, windbreakers and hats
featuring designs involving NASCAR drivers and cars.
Customers; Marketing and Sales
Customers
The company offers a diverse product line for sale at a full range of price
points through major distribution channels. Customers include chain stores such
as Foot Locker, department stores such as Sears and J.C. Penney, sporting goods
stores, and mass merchandisers such as Target, Wal-Mart and Kmart. The company's
higher-quality fleecewear and jersey products, such as the Discus Athletic and
Logo Athletic brands, are sold primarily through department and specialty stores
and mail-order distribution channels rather than through mass merchandisers and
wholesale clubs, thereby enabling Tultex to enhance the image of these branded
and private label products and achieve higher margins. The Tultex and Logo 7
brands are marketed through mass merchandisers and wholesale clubs that compete
more on price than brand.
The following chart details the distribution channels for the company's branded
products.
Brands Products Distribution Channels
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Discus Athletic Fleece and jersey activewear Sporting goods specialty stores and chain
stores (Sports Authority, Modell's), retail
chains (Sears), international distributors
and sales agencies (Nissan Trading)
Tultex Fleece and jersey activewear Mass merchants (Kmart, Wal-Mart),
retail chains (Montgomery Ward), region-
al discounters (Shopko, Hart's, Pamaida),
distributors and mass merchant screenprinters
(Brazos Sportswear, Jerry Leigh, Giant
Merchandise), wholesale clubs (Sam's)
LogoAthletic Licensed activewear, outerwear Retail chains (JC Penney, Sears), sport-
and headwear ing goods specialty stores (Champs, Foot
Locker), department stores (Dillard's,
Mercantile)
Logo 7 Licensed activewear, outerwear Mass merchants (Kmart, Target), distributors
and headwear (West Coast Novelties), wholesale clubs (Sam's)
Page 7
Track Gear Licensed activewear, outerwear Retail chains, corporate accounts, and
and headwear speedways
Marketing and Sales
The company has shifted its marketing strategy in recent years to focus on the
development of its own brands and sales through distribution channels that
support higher margins. In particular, the company has devoted significant
resources to the promotion of its Discus Athletic and LogoAthletic brands.
Advertising expenses were $23.6 million and $21.6 million in 1997 and 1996,
respectively.
In 1993, the company began conducting advertising campaigns to promote its
Discus Athletic and Logo Athletic brands. The Discus Athletic advertising
campaign emphasizes quality and the usefulness of the product for many sports.
The company believes that this positioning effectively differentiates the Discus
Athletic line from competing specialized lines with powerful brand associations.
To reinforce the association of the brand with competitive athletics, Discus
Athletic advertises on ESPN's college football and ABC's college basketball.
The Logo Athletic campaign focuses on establishing the "authenticity" of
LogoAthletic products. The company believes that licensed apparel sales benefit
substantially from the perception that products are the same as those worn by
professional sports stars. LogoAthletic acquired NFL Pro-Line status in 1993. To
provide visibility and reinforce this authenticity, the company provided
sideline garments and caps predominately featuring the LogoAthletic trademark
for eight NFL teams in 1997, the Cincinnati Bengals, Indianapolis Colts, St.
Louis Rams, Arizona Cardinals, Tampa Bay Buccaneers, Buffalo Bills, Seattle
Seahawks and Tennessee Oilers, as well as for several NFL All-Pro players, such
as Denver Broncos' John Elway, Miami Dolphins' Dan Marino, Kansas City Chiefs'
Marcus Allen and Buffalo Bills' Bruce Smith.
As of January 3, 1998, Tultex operated a sales office in each of Boston and
Chicago. These offices are the primary points of contact for customers and
coordinate sales, distribution of sales information, certain advertising,
point-of-sale displays and customer service. The company also employs seven
independent sales representatives to market its Discus Athletic line in the
fragmented sporting goods market. Logo 7's products are marketed through a sales
force of 50 people, including Logo 7 employees and independent sales
representatives. In 1996, the company renewed its agreement with Nissan Trading
Co., Ltd., a subsidiary of Nissan Motor Co., to market and sell the company's
Discus Athletic products in Japan. This agreement has been extended through
1999.
International sales in 1997 and 1996 were immaterial.
At January 3, 1998, Dominion Stores, Inc., a wholly-owned subsidiary, operated
10 outlet stores in North Carolina, Virginia and West Virginia, which sell
surplus company apparel and apparel items of other manufacturers, and operated
20 The Sweatshirt Company retail stores in 14 states, which primarily sell
first-quality company-made products and accessories, and operated 3 LogoAthletic
stores in Indiana and Utah which primarily sell surplus licensed apparel.
Dominion Stores' total sales in fiscal 1997 and 1996 were $15.5 million and
$16.4 million, respectively.
Licenses
Most of the company's licensed products are sold through LogoAthletic. The
company is a licensee of
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professional sports apparel, maintaining a full complement of licenses with all
of the major North American professional sports leagues -- the NFL, MLB, the NBA
and the NHL - and the Collegiate Licensing company. The company also holds
licenses for NASCAR. These licenses require the payment of royalties generally
ranging from 8% to 15% of sales with future guaranteed royalties of
approximately $2.4 million.
The company's licenses with MLB expire in 1998, NFL and NHL in 1999 and NBA in
2000.
The company's ability to compete is dependent on its ability to obtain and renew
licenses, particularly those from the major professional sports leagues. The
company enjoys long-standing relationships with its major league licensees,
having been awarded its first licenses with the NFL in 1971, with the NBA in
1977, with MLB in 1980 and with the NHL in 1988. The company has no reason to
believe that it will not be able to successfully renew these licenses. While the
company has enjoyed long, successful and uninterrupted licensing relationships
with its professional and collegiate athletic licensors, if a significant
license or licenses were not renewed or replaced, the company's sales would
likely be materially and adversely affected. In addition, the company's material
licenses are non-exclusive and new or existing competitors may obtain similar
licenses.
Manufacturing and Distribution
Because consumer value is a key competitive factor in the activewear industry,
Tultex has focused on being a low-cost producer of high-quality goods. The
company pursues this goal through cost reduction measures, plant modernization
and improvement of garment characteristics, such as increasing the range of
garment sizes, cloth weight, durability, style and comfort to meet consumer
demands.
The company continually reviews its cost structure and methods of manufacturing
and distributing its products in order to remain cost competitive. Over the last
several years, the company has closed or sold some of its costlier, less
efficient plants, including two domestic sewing plants in 1998. The company
expects that certain cost savings may be achieved through lower average
production costs in the more modern facilities and higher capacity utilization
in the remaining plants.
The company's manufacturing process consists of yarn production; fabric
construction including knitting, dyeing and finishing operations; apparel
manufacturing including cutting and sewing operations; and, for garments with
logos, screenprint and embroidery operations. As a result of its modernization
efforts, the company believes that its manufacturing facilities are outfitted
with some of the most efficient and technologically-advanced equipment in the
industry.
During fiscal 1989 through fiscal 1997, the company invested approximately $232
million to open new facilities, including sewing facilities in Roanoke, Virginia
and Montego Bay, Jamaica (a leased facility), and the highly automated customer
service center in Martinsville, Virginia, and to modernize other facilities.
Open-end spinning frames were acquired to increase yarn production and reduce
costs, higher color quality and lower dyeing costs were achieved from the
installation of new jet dyeing equipment, new dryers were added in the fabric
finishing process, automated cutting machines were introduced, and new
information systems were implemented.
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Tultex's highly-automated customer service center, opened in 1991, has expanded
the company's distribution capabilities. The customer service center allows the
company to package and ship its products according to the more detailed color,
size and quantity specifications typically required by high-volume retailers and
department stores. The company has improved its utilization of the customer
service center and believes that its strategy of increasing sales of retail
products, which require more sophisticated packaging, will continue to improve
utilization of the customer service center.
In spring 1992, LogoAthletic moved its operations to a newly-constructed, leased
facility built to its specifications. This 650,000 square foot building allowed
LogoAthletic to centralize operations, increase inventory control, improve
material flow and will allow for future expansion.
Tultex manufactures yarn at three facilities located in North Carolina, which
have a combined production capacity of 1.4 million pounds per week, utilizing
modern, open-end spinning frames. For its knitting operations, Tultex operates
approximately 500 modern high-speed, latch-needle circular knitting machines,
which produce various types of fabrics. The company believes its dyeing
operations are among the most modern and technologically efficient in the
industry; dyeing operations are computer-controlled, allowing precise
duplication of dyeing procedures to ensure "shade repeatability" and color-fast
properties. The finishing operations employ mechanical squeezing and steaming
equipment.
The Martinsville cutting facility uses advanced Bierrebi automatic continuous
cutting machines with computer-controlled hydraulic die-cutting heads and
"lay-up" machines and high-speed reciprocating knives. Sewing production at the
company's eight sewing facilities is organized on an assembly-line basis.
The company relies on a knitting ticket system to track and report the
manufacturing process from yarn inventory through the knitting of individual
rolls of fabric into greige cloth storage. From this point, the shop floor
control module of the Cullinet manufacturing system monitors and reports the
movement of each production lot through the operations of dyeing, finishing,
cutting and sewing. Each sewing plant then electronically transmits an advance
shipping notice to the automated customer service center so the distribution
planning module at the center can plan the arrival and storage/packing of the
sewn garments. Frontier knitting monitor systems, cutting production systems,
and sewing production systems use computer-based data collection on each
knitting, cutting, and sewing machine to monitor machine and operator
efficiency, data that is useful for quality control, incentive-based payroll
data, and production management information.
The company decorates its unfinished licensed apparel products using
screenprinting or embroidery at LogoAthletic's facilities in Indianapolis and
Logo Athletic/Headwear facilities in Massachusetts. Automatic silkscreen
machines and dryers are used for longer runs, and hand-operated presses are used
for shorter or more complicated runs. Embroidery is applied using high-speed,
computerized stitching equipment.
Sourcing
The company currently maintains full package sourcing utilizing vendor-direct
relationships and agents for over $70 million at cost in the following apparel
categories:
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Product Country of Origin
- -------------------------------------- -----------------
Headwear South Korea, China, Taiwan, Dominican Republic
Outerwear-Jackets South Korea, Pakistan
Collar and Placket Shirts Pakistan, Guatemala
Decorated Fashion Fleece China
Windwear Bangladesh, Mongolia, Sri Lanka, South Korea, Hong Kong
Baseball Shirts Guatemala
Mock Turtlenecks Mexico
Mesh Silhouettes South Korea
Novelty Jersey India, Pakistan
Fashion T's and Tank Tops Mexico
Sourced headwear accounts for approximately 35% of total sourced products.
The company utilizes 807 sewing assembly for generating cost savings on garments
requiring labor intensive needle work. These operations are performed at company
maintained locations in Jamaica and Mexico and by various contractors.
Approximately 65% of the company's sewing is done outside the United States.
Raw Materials
The company's principal raw materials for the production of activewear are
cotton and polyester. Cotton content in fleecewear typically is 50% and in
jersey apparel typically is 100%. The company is producing increasing amounts of
fleecewear containing 90-100% cotton. Fleecewear and jersey manufacturers are
extremely sensitive to fluctuations in cotton and polyester prices as these
materials represent approximately 30% of the manufacturing cost of the product.
In addition, the company is indirectly impacted by increasing costs of raw
materials in its licensed apparel business because the company purchases
finished goods containing cotton and polyester and these higher raw material
costs often are effectively passed on to the company. In 1997, the company's
average price per pound of fiber (cotton and polyester) purchased was $.68,
compared with $.75 in 1996. In 1998, Tultex expects to use approximately 55
million pounds of raw cotton and 20 million pounds of polyester staple in its
manufacture of fleecewear and jersey apparel. Tultex makes advance purchases of
raw cotton based on projected demand. As of March 11, 1998 the company has
contracted to purchase substantially all of its raw cotton needs for 1998 and
has fixed the price on approximately 60% of its raw cotton needs. To the extent
cotton prices increase before the company fixes the price for the remainder of
its raw cotton needs, the company's results of operations could be adversely
affected. Also in 1998, the company expects to use an additional 15 million
pounds of finished yarn which will be purchased.
Trademarks
The company increasingly promotes and relies upon its trademarks, including
Discus Athletic, LogoAthletic, Tultex, TrackGear and Logo 7, many of which are
registered in the United States and many foreign countries.
Page 11
Seasonality
The company's business is seasonal. The majority of fleecewear sales and related
net income occur in the third and fourth quarters, coinciding with cooler
weather and the playing seasons of popular professional and college sports.
Jersey sales peak in the second and third quarters of the year, somewhat
offsetting the seasonality of fleecewear sales.
Environmental Matters
The company is subject to various federal, state and local environmental laws
and regulations governing, among other things, the discharge, storage, handling
and disposal of a variety of substances and wastes used in or resulting from its
operations, including, but not limited to, the Water Pollution Control Act, as
amended; the Clean Air Act, as amended; the Resource Conservation and Recovery
Act, as amended; the Toxic Substances Control Act, as amended; and the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended.
The company returns dyeing wastes for treatment to the City of Martinsville,
Virginia's municipal wastewater treatment systems operated pursuant to a permit
issued by the state. The city has filed a timely application to renew its
permit. In 1989, the city adopted a plan for removing the coloration, caused by
the dye wastes, from the water by using polymer chemicals to combine with the
extremely small particles of the dye to create a sludge-like substance that can
be retrieved from the water at the city's wastewater treatment plant and
disposed of as non-hazardous waste in the city's landfill. To cover the cost to
the city, the company pays 50 to 80 cents per thousand gallons of water above
regular water costs. The expenditures required do not have a material effect on
the company's earnings or competitive position.
The company's operations also are governed by laws and regulations relating to
employee safety and health, principally the Occupational Safety and Health Act
and regulations thereunder, which, among other things, establish exposure
limitations for cotton dust, formaldehyde, asbestos and noise, and regulate
chemical and ergonomic hazards in the workplace.
The company believes that it is in material compliance with the aforementioned
laws and regulations and does not expect that future compliance and actions
responding to routine inspections will have a material adverse effect on its
capital expenditures, earnings or competitive position in the foreseeable
future. However, there can be no assurances that environmental and other legal
requirements will not become more stringent in the future or that the company
will not incur significant costs in the future to comply with such requirements.
Year 2000
In prior years, certain computer programs were written using two digits rather
than four to define the applicable year. These programs were written without
considering the impact of the upcoming change in the century and may experience
problems handling dates beyond the year 1999. This could cause computer
applications to fail or to create erroneous results unless corrective measures
are taken. Incomplete or untimely resolution of the Year 2000 issue could have a
material adverse impact on the
Page 12
company's business, operations or financial condition in the future. The company
has been assessing the impact that the Year 2000 issue will have on its computer
systems since 1995. In response to these assessments, which are ongoing, the
company has reviewed critical business systems and developed a plan to resolve
existing system deficiencies. Management expects substantial implementation in
1998 of enterprise-wide computer systems which are Year 2000 compliant. As of
January 3, 1998, approximately $18 million has been capitalized relating to this
implementation. The company is also surveying critical suppliers and customers
to determine the status of their Year 2000 compliance programs.
Litigation
The company is not currently a party to any legal proceedings the results of
which it believes could have a material adverse impact on its business or
financial condition.
Employees
The company had approximately 6,708 employees at January 3, 1998, of which 5,752
or 85.7% were paid hourly.
Hourly employees at the company's Martinsville and South Boston, Virginia
facilities are represented by the Union of Needletrades, Industrial and Textile
Employees. The company's labor contracts with the union, covering all hourly
employees at the Martinsville and South Boston facilities, expire in 1998. The
negotiation of new contracts are underway. As of January 3, 1998, the company's
hourly employees represented by the Union accounted for approximately 38.4% of
the company's total employees and 44.8% of the company's hourly employees. None
of the company's other employees are represented by a union. The following table
summarizes the approximate number of employees in the company's principal
divisions at January 3, 1998.
Division Salary Hourly Total
- -------- ------ ------ -----
Activewear 813 5,009 5,822
Licensed Apparel 143 743 886
--- --- ---
Total 956 5,752 6,708
================ ======== =======
Page 13
Item 2. Properties
Most of the company's principal physical facilities (other than those of
LogoAthletic) are located in Virginia and North Carolina, within a 150 - mile
radius of the City of Martinsville. All buildings are well-maintained. The
company and its subsidiaries also lease sales offices and retail outlets in
major cities from coast to coast. The location, approximate size and use of the
company's principal owned properties are summarized in the following table:
Square
Location Footage Use
- -------- ------- ---
Martinsville, VA 1,100,000 Manufacturing (apparel) and administrative
offices
Koehler, VA 60,000 Equipment Storage
South Boston, VA 130,000 Sewing (apparel)
Bastian, VA 53,500 Sewing (apparel)
Longhurst, NC 287,000 Manufacturing (yarn)
Roxboro, NC 110,000 Manufacturing (yarn)
Mayodan, NC 612,000 Manufacturing, warehousing
and shipping (yarn and apparel)
Vinton, VA 50,000 Sewing (apparel)
Martinsville, VA 502,200 Warehousing and distribution (apparel)
Mattapoisett, MA 116,250 Distribution (headwear)
Asheville, NC 106,650 Manufacturing (apparel)
Tamaulipas, Mexico 23,500 Sewing (apparel)
Page 14
The following table presents certain information relating to the company's
principal leased facilities:
Lease
Expira- Current
Square tion Annual
Location Footage Date Rental Use
- ------------------------------------------------------------------------------------
Montego Bay, 28,422 4/30/98 113,688 Sewing (apparel)
Jamaica
Montego Bay, 38,088 12/31/98 152,352 Sewing (apparel)
Jamaica
Martinsville, VA 300,000 06/01/98 684,000 Warehousing (apparel)
Indianapolis, IN 650,000 05/31/07 1,408,000 Distribution (licensed apparel)
Charlotte, NC 34,000 10/30/00 134,892 Distribution (licensed apparel)
Fullerton, CA 205,000 12/31/04 762,600 Distribution (apparel)
Fullerton, CA 12,630 12/31/98 60,840 Warehousing (apparel)
Oakland, CA 22,282 07/31/99 70,404 Distribution (apparel)
San Diego, CA 23,812 Monthly 142,872 Distribution (apparel)
Honolulu, HI 8,257 Monthly 67,088 Distribution (apparel)
Seattle, CA 34,020 09/30/00 178,308 Distribution (apparel)
Las Vegas, NV 31,889 07/31/03 168,372 Distribution (apparel)
Tempe, AZ 20,400 03/31/02 100,368 Distribution (apparel)
Cincinnati, OH 105,000 02/28/99 199,200 Distribution (apparel)
Charlotte, NC 38,400 02/28/03 151,680 Distribution (apparel)
Manufacturing equipment, substantially all of which is owned by the company,
includes carding, spinning and knitting machines, jet-dye machinery, dryers,
cloth finishing machines, cutting and sewing equipment and automated
storage/retrieval equipment. This machinery is modern and kept in good repair.
The company leases a fleet of trucks and tractor-trailers which are used for
transportation of raw materials and for interplant transportation of
semi-finished and finished products. The company's facilities and its
manufacturing equipment are considered adequate for its needs.
Page 15
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5. Market for Registrant's Common Stock and Related Stockholder Matters.
As of February 27, 1998 there were 2,291 record holders of the Company's common
stock. Other information required by Item 5 of Form 10-K appears under the
heading "Common Stock Prices and Dividend Information" on page 22 and in "Note
6" of "Notes to Financial Statements" on page 12 of the company's 1997 Annual
Report to Stockholders and is incorporated herein by reference.
Item 6. Selected Financial Data.
The information required by Item 6 of Form 10-K appears on page 23 of the
company's 1997 Annual Report to Stockholders and is incorporated herein by
reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The information required by Item 7 of Form 10-K appears on pages 20 through 22
of the company's 1997 Annual Report to Stockholders and is incorporated herein
by reference.
Item 8. Financial Statements and Supplementary Data.
The consolidated financial statements, together with the report thereon of Price
Waterhouse LLP, dated February 11, 1998, appearing on pages 6 through 19 of the
company's 1997 Annual Report to Stockholders are incorporated by reference in
this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
With respect to the directors of the company, the information required by Item
10 of Form 10-K appears on pages 3 through 5 of the company's 1998 Proxy
Statement and is incorporated herein by reference.
Page 16
Pursuant to General Instruction G to Form 10-K, the following information is
furnished concerning the executive officers of the company.
Executive Officers of the Company
Name Office Age
- -------------------------------------------------------------------------------------------------------
John M. Franck Chairman of the Board of Directors 45
Charles W. Davies, Jr. President and Chief Executive Officer 49
O. Randolph Rollins Executive Vice President and General Counsel 55
Walter J. Caruba Vice President - Marketing and Sales 50
Anthony J. Pichirallo Vice President - Wholesale Marketing 39
W. Jack Gardner, Jr. Vice President - Operations 54
Jefferson K. Judkins Vice President - Customer Service 38
John J. Smith Vice President 55
Suzanne H. Wood Vice President and Chief Financial Officer 38
Jeffrey F. Kies Corporate Controller 41
Robin H. Gehman Treasurer 43
Kathy H. Rogers Secretary 39
John M. Franck, Chairman of the Board of Directors, was Chairman of the Board of
Directors and Chief Executive Officer from January 1991 to January 1995, and
served as President and Chief Operating Officer from November 1988 to January
1991. Mr. Franck is a director of Piedmont Trust Bank, Martinsville, Virginia.
Charles W. Davies, Jr., President and Chief Executive Officer of the Company
since January 1995, was President and Chief Operating Officer from January 1991
to January 1995, and Executive Vice President from December 1989 to January
1991. From February 1988 through November 1989, he was President and Chief
Executive Officer of Signal Apparel Company in Chattanooga, Tennessee. From
March 1986 to February 1988, Mr. Davies was President of Little Cotton
Manufacturing Company in Wadesboro, North Carolina, and from December 1984
through February 1986 was Senior Vice President of Fieldcrest-Cannon in
Kannapolis, North Carolina.
Page 17
O. Randolph Rollins became Executive Vice President and General Counsel in
October 1994. From 1995 to 1996 he was Chief Financial Officer. Prior thereto,
Mr. Rollins was a partner with the law firm of920411346 McGuire, Woods, Battle &
Boothe, Richmond, Virginia, from 1973 to 1990 and from January 1994 to October
1994. From 1990 to January 1994, Mr. Rollins served in the Cabinet of Virginia's
Governor L. Douglas Wilder, first as Deputy Secretary of Public Safety and from
1992 through January 14, 1994 as Secretary of Public Safety of the Commonwealth
of Virginia. Mr. Rollins is the brother-in-law of John M. Franck.
Walter J. Caruba became Vice President - Marketing and Sales in September 1992.
He served as Vice President Distribution between October 1990 and September
1992. He served as General Manager - Planning from November 1989 to October 1990
and was Director - Production Control from December 1985 to November 1989.
Anthony J. Pichirallo became Vice President - Wholesale Marketing in February
1997. He served as General Manager - Wholesale from July 1991 until that time.
W. Jack Gardner, Jr. became Vice President - Operations in September 1994 and
served as General Manager - Fabric Manufacturing from January 1988 until that
time.
Jefferson K. Judkins became Vice President - Customer Service in August 1997. He
previously served as General Manager - Customer Service from February 1997 until
July 1997 after serving as Retail Sales Manager since October 1992.
John J. Smith became Vice President in September 1992. Prior thereto, he served
as Vice President - Sales and Marketing since December 1987 after serving as
Director - Corporate Planning since May 1987. He was Manager Information Systems
& Services between December 1985 and May 1987.
Suzanne H. Wood became Vice President and Chief Financial Officer in February
1996. Prior to that appointment, Ms. Wood was Corporate Controller. In the ten
years prior to joining the company, she was employed by Price Waterhouse LLP,
most recently as Audit Senior Manager.
Jeffrey F. Kies became Corporate Controller in August 1996. Prior to joining the
company, he was employed by R. J. Reynolds Tobacco Co. as Senior Financial
Manager.
Robin H. Gehman became Treasurer in May 1997. In the sixteen years prior to
joining the company, he was employed by VF Corporation, most recently as Vice
President of Finance for Bassett Walker, Inc.
Kathy H. Rogers became Secretary in January 1996. She also continues as Director
- - Corporate Communications, a position she has held since September 1992. She
was Manager - Employee Communications between May 1989 and September 1992.
All terms of office will expire concurrently with the meeting of directors
following the next annual meeting of stockholders at which the directors are
elected.
Page 18
Item 11. Executive Compensation.
The information required by Item 11 of Form 10-K appears on pages 6 through 7
and pages 9 through 11 of the company's 1998 Proxy Statement and is incorporated
herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by Item 12 of Form 10-K appears on page 1 and 2 of the
company's 1998 Proxy Statement and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions.
The information required by Item 13 of Form 10-K appears on page 5 of the
company's 1998 Proxy Statement and is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
(1) Financial Statements: Page in Annual Report*
--------------------- ----------------------
Report of Independent Accountants 19
Balance Sheet at January 3, 1998 and
December 28, 1996 6
Statement of Operations for each of the three years in the
period ended January 3, 1998 7
Statement of Changes in Stockholders' Equity for each of
the three years in the period ended January 3, 1998 8
Statement of Cash Flows for each of the three years in the
period ended January 3, 1998 9
Notes to Financial Statements 10 - 19
(2) Financial Statement Schedule: Page in Form 10-K
----------------------------- -----------------
Report of Independent Accountants on Financial
Statement Schedule: F-1
Consolidated Financial Statement Schedule for each of the
three years in the period ended January 3, 1998:
II-Valuation and Qualifying Accounts and Reserves F-2
All other schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
*Incorporated by reference from the indicated pages of the 1997 Annual Report to
Stockholders.
Page 19
(3) Exhibits
3.1 Restated Articles of Incorporation (filed as Exhibit 3.1 to the
company's Form 10-K for the year ended December 29, 1990 and
incorporated herein by reference)
3.2 Articles of Amendment to the Restated Articles of Incorporation
(filed as Exhibit 3 to the company's 8-K dated January 31, 1992
and incorporated herein by reference)
3.3 By-laws of Tultex Corporation (filed as Exhibit 3.3 to the
company's Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
3.4 Articles of Incorporation of AKOM Ltd. (filed as Exhibit 3.4 to
the company's Amendment No. 1 to Form S-1 dated March 17, 1995
and incorporated herein by reference)
3.5 By-laws of AKOM, Ltd. (filed as Exhibit 3.5 to the company's
Amendment No. 1 to Form S-1 dated March 17, 1995 and incorporated
herein by reference)
3.6 Articles of Incorporation of Dominion Stores, Inc. (filed as
Exhibit 3.6 to the company's Amendment No. 1 to Form S-1 dated
March 17, 1995 and incorporated herein by reference)
3.7 By-laws of Dominion Stores, Inc. (filed as Exhibit 3.7 to the
company's Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
3.8 Articles of Incorporation of Tultex International, Inc. (filed as
Exhibit 3.8 to the company's Amendment No. 1 to Form S-1 dated
March 17, 1995 and incorporated herein by reference)
3.9 By-laws of Tultex International, Inc. (filed as Exhibit 3.9 to
the company's Amendment No. 1 to Form S-1 dated March 17, 1995
and incorporated herein by reference)
3.10 Articles of Incorporation of Logo 7, Inc. (filed as Exhibit 3.10
to the company's Amendment No. 1 to Form S-1 dated March 17, 1995
and incorporated herein by reference)
3.11 By-laws of Logo 7, Inc. (filed as Exhibit 3.11 to the company's
Amendment No. 1 to Form
3.12 S-1 dated March 17, 1995 and incorporated herein by reference)
3.12 Articles of Incorporation of Universal Industries, Inc. (filed as
Exhibit 3.12 to the company's Amendment No. 1 to Form S-1 dated
March 17, 1995 and incorporated herein by reference)
3.13 By-laws of Universal Industries, Inc. (filed as Exhibit 3.13 to
the company's Amendment No. 1 to Form S-1 dated March 17, 1995
and incorporated herein by reference)
3.14 Articles of Incorporation of Tultex Canada, Inc. (filed as
Exhibit 3.14 to the company's Amendment No. 1 to Form S-1 dated
March 17, 1995 and incorporated herein by reference)
3.15 By-laws of Tultex Canada, Inc. (filed as Exhibit 3.15 to the
company's Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
3.16 Articles of Incorporation of SweatJet, Inc. (filed as Exhibit
3.16 to the company's Amendment No. 1 to Form S-1 dated March 17,
1995 and incorporated herein by reference)
3.17 By-laws of SweatJet, Inc. (filed as Exhibit 3.17 to the company's
Amendment No. 1 to Form S-1 dated March 17, 1995 and incorporated
herein by reference)
4.1 Indenture among Tultex Corporation, the Guarantors and First
Union National Bank of Virginia, as Trustee, relating to the
Senior Notes dated March 23, 1995 (filed as Exhibit to the
company's Amendment No. 1 to Form S-1 dated March 17, 1995 and
incorporated herein by reference)
4.2 Senior Note (included in Exhibit 4.1 as filed with the company's
Amendment No. 1 to Form S-1 dated March 17, 1995 and incorporated
herein by reference)
4.3 Subsidiary Guarantee (included in Exhibit 4.1 as filed with the
company's Amendment No. 1
Page 20
to Form S-1 dated March 17, 1995 and incorporated herein by
reference)
4.4 Indenture between Tultex Corporation and the Guarantors, and
First Union National Bank of Virginia, as Trustee, relating to
the notes (filed as Exhibit 4.1 to the company's Form S-4 filed
with the SEC on April 16, 1997 and incorporated herein by
reference)
10.1 Tultex Corporation 1987 Stock Option Plan (filed as Exhibit B to
the company's Definitive Proxy Statement dated and mailed January
15, 1988 and incorporated herein by reference)
10.2 Tultex Corporation 1990 Stock Option Plan (filed as Exhibit A to
the company's Definitive Proxy Statement dated and mailed
February 14, 1991 and incorporated herein by reference)
10.3 Supplemental Retirement Plan (filed as an exhibit to the
company's Form 10-K for the fiscal year ended December 30, 1990
and incorporated herein by reference)
10.4 Tultex Corporation Salaried Employees' Common Stock Purchase
Plan, dated February 11, 1994 (filed as Exhibit 4.5 to the
company's Registration Statement Form S-8 dated February 11, 1994
and incorporated herein by reference)
10.5 Form of Employment Continuity Agreement (filed as exhibits to the
company's Form 10-Q for the quarter ended April 1, 1989 and the
company's Form 10-Q for the quarter ended March 31, 1990 and
incorporated herein by reference)
10.6 Standstill Agreement, dated as of January 31, 1992, among Tultex
Corporation, Logo 7, Inc. (Ind.), Melvin Simon and Herbert Simon
(filed as Exhibit 10(b) to the company's Form 8-K dated January
31, 1992 and incorporated herein by reference)
10.7 Credit Agreement for $187 million credit facility, dated May 18,
1997 (filed as Exhibit 10.8 to the company's Form 10-Q for the
quarter ended July 5, 1997 and incorporated herein by reference)
10.8 Amendment, consent and waiver relating to the $187 million credit
facility, dated as of November 4, 1997 (filed as Exhibit 10.9 to
the company's Form 10-Q for the quarter ended October 4, 1997 and
incorporated herein by reference)
10.9 Amendment, consent and waiver relating to the $187 million credit
facility, dated as of March 11, 1998 (filed herewith)
11 The computation of earnings per share can be clearly determined
from the financial statements of the Company contained in the
Annual Report to Stockholders
13 The company's 1997 Annual Report to Stockholders (filed herewith)
21 Subsidiaries of the company (filed herewith)
23 Consent of Price Waterhouse LLP (filed herewith)
99 The company's 1998 Proxy Statement dated March 21, 1998 (filed
herewith)
(b) Reports of Form 8-K
No reports on Form 8-K were filed for the quarter ended January
3, 1998.
Page 21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Tultex Corporation
(Registrant)
/s/ Charles W. Davies, Jr.
By: Charles W. Davies, Jr., President and
CEO
Date: April 3, 1998
-------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
April 3, 1998 /s/ Charles W. Davis, Jr.
- ------------- -------------------------
Charles W. Davies, Jr., President, CEO &
Director (Principal Executive Officer)
April 3, 1998 /s/ Suzanne H. Wood
- ------------- -------------------
Suzanne H. Wood, Vice President and Chief
Financial Officer (Principal Financial Officer)
April 3, 1998 /s/ Jeffrey F. Kies
- ------------- -------------------
Jeffrey F. Kies, Controller
(Principal Accounting Officer)
April 3, 1998 /s/ John M. Franck
- ------------- ------------------
John M. Franck, Director (Chairman)
April 3, 1998 /s/ Seth P. Bernstein
- ------------- ---------------------
Seth P. Bernstein, Director
April 3, 1998 /s/ Lathan M. Ewers
- ------------- -------------------
Lathan M. Ewers, Jr., Director
April 3, 1998 /s/ H. Richard Hunnicut, Jr.
- ------------- ----------------------------
H. Richard Hunnicutt, Jr., Director
April 3, 1998 /s/ F. Kenneth Iverson
- ------------- ----------------------
F. Kenneth Iverson, Director
April 3, 1998 /s/ Bruce M. Jacobson
- ------------- ---------------------
Bruce M. Jacobson, Director
Page 22
April 3, 1998 /s/ Richard M. Simmons
- ------------- ----------------------
Richard M. Simmons, Jr., Director
April 3, 1998 /s/ Lynn J. Beasley
- ------------- -------------------
Lynn J. Beasley, Director
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of
Tultex Corporation
Our audits of the consolidated financial statements referred to in our report
dated February 11, 1998 appearing on page 19 of the 1997 Annual Report to
Stockholders of Tultex Corporation, (which report and consolidated financial
statements are incorporated by reference in this Annual Report on Form 10-K),
also included an audit of the Financial Statement Schedule listed in the
accompanying index of this Form 10-K. In our opinion, this Financial Statement
Schedule presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Winston-Salem, North Carolina
February 11, 1998
TULTEX CORPORATION SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS CONSOLIDATED
AND RESERVES
(In thousands of dollars)
Balance at Additions Balance
beginning charged to at end
Reserve for doubtful accounts of period operations Acquisitions Reductions(1) of period
- ----------------------------- --------- ---------- ------------ ---------- -----------
For the fifty-two weeks
ended December 30, 1995
$ 2 ,115 $ 7,061 $ 0 $ (4,949) $ 4,227
============== ============== ============== ============ ===========
For the fifty-two weeks
ended December 28, 1996
$ 4,227 $ 3,707 $ 0 $ (4,172) $ 3,762
============== ============== ============== ============== ==============
For the fifty-three weeks
ended January 3, 1998
$ 3 ,762 $ 3,606 $ 1,512 $ (4,675) $ 4,205
============== ============== ============== ============== ==============
(1) Amounts represent write-off of uncollectible receivable balances.
F-2
Exhibit Index
10.9 Amendment, consent and waiver relating to the $187 million
credit facility
13 The company's 1997 Annual Report to Stockholders
21 Subsidiaries of the Company
23 Consent of Price Waterhouse
99 The company's 1998 Proxy Statement
EXHIBITS
ANNUAL REPORT ON FORM 10-K
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED JANUARY 3, 1998
TULTEX CORPORATION
COMMISSION FILE NUMBER 1-8016