UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 13, 1999
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GALEY & LORD, INC.
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Exact name of registrant as specified in its charter
DELAWARE 56-1593207
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State or other jurisdiction of IRS Employer Identification No.
incorporation or organization
980 Avenue of the Americas, New York, New York 10018
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Address of principal executive offices Zip Code
212/465-3000
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Registrant's telephone number, including area code
Not Applicable
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Former name, former address and former fiscal year, if changed since last report.
ITEM 5. OTHER EVENTS.
Incorporated by reference herein and attached as an exhibit hereto is the press
release of Galey & Lord, Inc. (the "Company") dated July 13, 1999 announcing
that the Company's expected earnings for the June quarter 1999 will likely fall
short of the average estimates that stock analysts have projected.
On July 13, 1999, the Company amended its credit agreement, dated as of January
29, 1998, as amended, with First Union National Bank, as agent and lender and
its syndicate of lenders. The amendment which became effective as of July 3,
1999 (the "Amendment") replaced the Adjusted Leverage Ratio covenant (as defined
in the Amendment) with a minimum EBITDA covenant (as defined in the Amendment)
until the Company's December quarter 2000, replaced the Consolidated Net Worth
covenant with a Consolidated Retained Earnings covenant (as defined in the
Amendment), waived compliance by the Company with the Adjusted Fixed Charge
Coverage Ratio until the Company's December quarter 2000 and modified the
Company's covenant related to capital expenditures.
Under the Amendment, the interest rate spread on all borrowings under the
Company's revolving line of credit and term loans will increase by 50 basis
points for the period beginning July 4, 1999 through February 15, 2001. In
addition, the Company repaid $25 million principal amount of its term loan
balance using available borrowings under its revolving line of credit and
reduced the maximum amount of borrowings under the revolving line of credit by
$25 million to $200 million. In addition, the Company and each of its domestic
subsidiaries granted the lenders, as additional collateral, a lien on all real
property owned in the United States.
FORWARD-LOOKING STATEMENTS
This Form 8-K contains statements which constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Those statements
include statements regarding the intent, belief or current expectations of the
Company and its management team. Prospective investors are cautioned that any
such forward-looking statements are not guarantees of future performance and
involve risks and uncertainties, and that actual results may differ materially
from those projected in the forward-looking statements. Such risks and
uncertainties include, among other things, competitive and economic factors in
the textile, apparel and home furnishings markets, raw material and other costs,
weather-related delays, general economic conditions and other risks and
uncertainties that may be detailed herein or from time to time in the Company's
other reports filed with the Securities and Exchange Commission.
Exhibits
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1. Press Release of Galey & Lord, Inc., dated July 13, 1999.
2. Fifth Amendment to the Credit Agreement dated July 3, 1999 among the
Company, Galey & Lord Industries, Inc., G&L Service Company, N.A.,
Inc., Swift Textiles, Inc., Swift Denim Services, Inc., Galey & Lord
Properties, Inc., Swift Denim Properties, Inc. and First Union National
Bank, as agent and lender, and the other lenders' party thereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Galey & Lord, Inc.
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(Registrant)
/s/ Michael R. Harmon
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Michael R. Harmon
Executive Vice-President,
Chief Financial Officer
(Principal Financial and
Accounting Officer),
Treasurer and Secretary
July 14, 1999
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Date