ITEM 1. BUSINESS
The Company is a leader in each of its three business segments: Automotive Products, the largest supplier of interior trim products to the North American automotive industry; Interior Furnishings, the largest manufacturer of residential upholstery fabrics in the U.S.; and Wallcoverings, the largest producer of residential wallpaper in the U.S. For certain financial information regarding the Company's business segments, see Note 20 to Consolidated Financial Statements on page 49 of the Company s 1994 Annual Report to Stockholders and Management's Discussion and Analysis of Financial Condition and Results of Operations on page 17 of the Company's 1994 Annual Report to Stockholders, which are incorporated herein by reference. For a discussion of the organization of the Company, certain developments in July 1994 resulting in a recapitalization of the Company and certain related mergers, see Notes 1 and 2 of the Consolidated Financial Statements on page 32 of the Company's 1994 Annual Report to Stockholders and the information under the Caption "Initial Public Offering and Recapitalization" on page 17 of the Company's 1994 Annual Report to Stockholders, which are incorporated herein by reference. With respect to market or competitive information, references to the Company as "a leader", "a leading" or "one of the leading" manufacturers in that product category mean that the Company is one of the principal manufacturers in that product category and references to the Company as "the leader", "the largest" or "the leading" manufacturer in a particular product category mean that the Company has the largest product market share based on dollar sales volume in that product category.
All references to a year with respect to the Company refer to the fiscal year of the Company which ends on the last Saturday of January of the following year.
AUTOMOTIVE PRODUCTS
General
The Company is a leading designer and manufacturer of automotive products with 1994 net sales in this segment of $904.9 million. Automotive Products supplies four major interior trim products--automotive seat fabric ("bodycloth"), molded floor carpets, accessory floor mats and luggage compartment trim--and convertible top systems. Automotive Products had 1994 net sales in these product lines of $751.6 million. Automotive Products has supplied interior trim products to the automotive industry for over 60 years. While some interior trim suppliers have sales volumes equivalent to or greater than that of the Company in a single product line, management believes that the Company sells a wider variety of interior trim products, has products on more vehicle lines and has a broader, more uniform sales penetration at U. S. automotive equipment manufacturers and foreign owned North American automotive production and assembly facilities ("Transplants" and, collectively, "OEMs") than any of its competitors.
The Company's sales are dependent on certain significant customers. In 1994, direct and indirect sales to each of General Motors Corporation, Ford Motor Company and Chrysler Corporation accounted for 10% or more of the Company's net sales. In 1993 and 1992, direct and indirect sales to each of General Motors Corporation and Chrysler Corporation accounted for 10% or more of the Company's net sales.
Automotive industry demand historically has been influenced by both cyclical factors and long-term growth trends in the driving age population and real per capita income.
Annual new car and truck sales historically have been cyclical. In the most recent cycle, U.S. light vehicle sales declined from an average of 15.4 million units per year in 1986-1988 to a low of 12.3 million units in 1991. Since late 1993, however, U.S. light vehicles sales have increased.
Products
Automotive Products manufactures five principal products: automotive seat fabric, molded floor carpets, accessory floor mats, luggage compartment trim and convertible top systems. Automotive Products also produces a variety of other automotive and nonautomotive products.
Automotive Seat Fabric. Automotive Products manufactures a wide variety of bodycloth, including flat-wovens, velvets and knits. Automotive Products also laminates foam to bodycloth. In 1994, 1993 and 1992, Automotive Products had net sales of bodycloth of $340.3 million, $221.2 million and $191.1 million, respectively.
Molded Floor Carpets. Molded floor carpets include polyethylene, barrier-backed and molded urethane underlay carpet. In the Company's automotive molded floor product line, it has developed a "foam-in-place" process to provide floor carpeting with enhanced acoustical and fit characteristics, resulting in a substantial gain in unit selling prices. In 1994, 1993 and 1992 net sales of molded floor carpets were $213.2 million, $181.1 million, and $173.1 million, respectively.
Accessory Floor Mats. Automotive Products produces carpeted automotive accessory floor mats for both North American produced vehicles and imported vehicles. In 1994, management estimates that approximately 63% of all vehicles produced in North America included accessory mats as original equipment.
Luggage Compartment Trim. Luggage compartment trim includes one-piece molded trunk systems and assemblies, wheelhouse covers, seatbacks, tireboard covers, center pan mats and other trunk trim products.
Convertible Top Systems. Automotive Products designs, manufactures and distributes convertible top systems through its Dura Convertible Systems subsidiary ("Dura"). In October 1993, Dura began shipping its "Top-in-a-Box" system, in which it designs and manufactures all aspects of a convertible top, including the framework, trim set, backlight and actuating system.
Other. Automotive Products also produces a variety of other auto products, including die cuts for automotive interior trim applications, convertible power train units, headliner fabric, and roll goods for export and domestic consumption. Small volumes of certain products, such as residential floor mats, casket and tie linings and sliver knits, are sold to other commercial and industrial markets.
Competition
The automotive supply business is highly competitive. The primary competitor in bodycloth is Milliken & Company. The primary competitors in molded floor carpets are Masland Corporation and JPS Automotive Products Corp. In accessory floor mats, the Company competes primarily against Pretty Products Company. Automotive Products' primary competitors in luggage compartment trim are Masland Corporation and Gates Corporation. In convertible top stacks, Automotive Products competes primarily against American Sunroof Corporation and Best Top.
The Company principally competes for new business at the design stage of new models and upon the redesign of existing models. The Company is vulnerable to a decrease in demand for the models that generate the most sales for the Company, a failure to obtain purchase orders for new or redesigned models and pricing pressure from the major automotive companies.
Facilities
Automotive Products has 34 manufacturing, warehouse and other facilities located in the U.S., Canada and Mexico aggregating approximately 5.9 million square feet. The majority of these facilities are located in North Carolina, Ohio and Michigan and in Ontario and Quebec, Canada. Approximately 90% of the total square footage of these facilities is owned and the remainder is leased. Many facilities are strategically located to provide just-in-time ("JIT") inventory delivery to the Company's customers. Capacity at any plant depends, among other things, on the product being produced, the processes and equipment used and tooling. This varies periodically, depending on demand and shifts in production between plants. The Company currently estimates that its Automotive Products plants generally operate at between 50% and 100% of capacity on a six- day basis. During the second half of 1994 the Company experienced capacity constraints with respect to certain automotive seat fabrics. To meet customer expectations, the Company utilized outside weaving and redeployed certain manufacturing capacity from its Decorative Fabrics velvet furniture products. Except for the foregoing constraints, which the Company believes are short term, the Company's capacity utilization in this segment is generally in line with its past experience in similar economic situations, and the Company believes that its existing facilities are sufficient to meet both this segment's existing needs and its anticipated growth requirements. The Company does not anticipate any circumstances that would render its facilities inadequate for its projected needs.
INTERIOR FURNISHINGS
Interior Furnishings designs and manufactures residential and commercial upholstery fabrics through its Decorative Fabrics group and high-end specified contract floorcoverings through its Floorcoverings group. In 1994, the Interior Furnishings segment had net sales of $414.5 million.
Decorative Fabrics
General. Interior Furnishings' Decorative Fabrics group is the largest designer and manufacturer of upholstery fabrics in the U.S. The Decorative Fabrics group had 1994 net sales of $306.5 million. Decorative Fabrics strives to be the preferred supplier of middle to high-end flat-woven upholstery fabrics to furniture manufacturers and fabric distributors. This group's primary division, Mastercraft, is the leading manufacturer of flat-woven upholstery fabrics. Management believes that Mastercraft has substantially more Jacquard looms and styling capacity dedicated to upholstery fabrics, and offers more patterns (approximately 13,000) in a greater range of price points than any of its competitors. The breadth and size of Mastercraft's manufacturing and design capabilities provide it with exceptional flexibility to respond to changing customer demands and to develop innovative product offerings. In order to accommodate anticipated growth, the Company is in the initial phase of a four year, $85 million modernization program. Investment is targeted toward the purchase of high-speed looms to increase capacity and productivity, new electronic jacquard heads to reduce pattern changeover times, and computer monitoring systems to provide information about the manufacturing processes and to improve quality, productivity and capacity.
The three primary types of upholstery fabric are flat-wovens, velvets and prints. Flat-woven fabrics are made in two major styles: Jacquard, which is produced on high- speed computerized looms capable of weaving intricate designs into the fabric, and Dobby, a plain fabric produced on standard looms. Demand for upholstery fabric generally varies with economic conditions, particularly sales of new and existing homes, and is directly associated with sales of upholstered furniture at the retail level. Shifts in consumer taste can also affect demand for upholstery fabric.
Products. Decorative Fabrics' two operating divisions are Mastercraft and Cavel. Mastercraft and Cavel design and manufacture jacquards, velvets and other woven fabrics for the furniture, interior design, commercial, recreational vehicle and industrial markets. During 1994, the Company sold the Greeff and Warner product lines through which it had designed and distributed high-end fabrics to interior designers and specialty retailers in the U.S. and U.K., respectively.
Decorative Fabrics had net sales of flat-woven products in 1994, 1993 and 1992 of $262.8 million, $268.9 million and $254.7 million, respectively.
Customers. Decorative Fabrics is a primary supplier to virtually all major furniture manufacturers in the U.S., including La-Z-Boy, Ethan Allen, Thomasville, Flexsteel, Bassett, Broyhill, Baker, Henredon, Rowe and Robert Allen. Due to the breadth of its product offerings, strong design capabilities and superior customer service, the Company has developed close relationships with many of Decorative Fabrics' over 1,000 customers.
Nearly all of Decorative Fabrics' products are made to customer order. This reduces the amount of raw material and finished goods inventory required and greatly reduces product returns, all of which improve profit margins.
Marketing and Sales. Fabrics are sold domestically by commissioned sales representatives who exclusively represent the Mastercraft and Cavel divisions of Decorative Fabrics. The Mastercraft and Cavel divisions maintain showrooms in seven key locations throughout the United States.
Competition. The U.S. upholstery fabrics market is highly competitive. Manufacturers compete on the basis of design, quality, price and customer service. Decorative Fabrics' primary competitors include Quaker Fabric Corporation, Culp, Inc., Joan Fabrics Corp. and the Burlington House Upholstery Division of Burlington Industries, Inc.
Facilities. Mastercraft operates four weaving plants and one finishing plant in North Carolina aggregating 1.0 million square feet, of which 89% is owned and the remainder leased. Cavel shares manufacturing capacity with Automotive Products at three plants in Roxboro, North Carolina. During the last three years, the Company's capacity utilization in the Mastercraft division of the Decorative Fabrics group has consistently averaged nearly 100% on a six-day basis. The Company believes that its existing facilities are sufficient to meet the Decorative Fabrics group's existing needs, and, after taking into account Mastercraft's $85 million capital investment plan (see page 22 of Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources in the Company's 1994 Annual Report to Stockholders which is incorporated herein by reference), anticipated growth requirements. Assuming the completion of Mastercraft's capital investment plan, the Company does not anticipate any circumstances that would render its Decorative Fabrics facilities inadequate for its projected needs.
Floorcoverings
General. The Floorcoverings group of the Interior Furnishings segment is a leading producer of high-end specified contract carpeting products for institutional and commercial customers. In 1994 Floorcoverings had net sales of $108.0 million. Its principal products are six-foot wide rolls and modular carpet tiles. Floorcoverings produces virtually no product for inventory or for commodity markets.
Since 1990, Floorcoverings has repositioned its product offerings, shedding those products in which it lacked either a low-cost position or proprietary product advantage. By focusing on areas of competitive advantage, Floorcoverings has prospered, notwithstanding a significant downturn in commercial construction.
During 1994, Floorcoverings initiated its Source OneSM program to sell its products directly to end users which provides them turnkey full service project management.
Approximately 56% of Floorcoverings' 1994 net sales were to institutional customers such as government, healthcare, and education facilities. Management believes that government, healthcare and educational customers are stable growth sectors.
Products. Floorcoverings' key competitive advantage in its principal products, six- foot wide rolls and modular carpet tiles, is its patented Powerbond RS(R) adhesive technology, which has 13 years of patent protection remaining. Because the Powerbond RS(R) system does not use wet adhesives, it permits the installation of floorcoverings directly on floor surfaces, including existing carpeting, with substantially reduced labor costs and without the fumes of conventional wet adhesives. This allows for less disruptive and less time-consuming installation and, for this reason, is particularly attractive to institutions such as schools and hospitals. In addition to reducing installation downtime for customers to as little as one day, management believes Floorcoverings' product exhibits demonstrably superior durability and cleaning characteristics ideally suited for high-traffic areas such as airline terminals and customers such as Discovery Zone and Blockbuster.
Competition. The commercial carpet industry is highly competitive, and several of Floorcoverings' competitors also have substantial commercial carpet sales in the commodity segments of the industry, segments in which Floorcoverings does not compete. Floorcoverings' niche products have demanding specifications and generally cannot be manufactured using the equipment that currently supplies most of the industry's commodity products. The Company's primary competitors are Interface, Milliken & Company, Mohawk Industries and Shaw Industries, Inc.
Facilities. Floorcoverings owns and operates four facilities in Dalton, Georgia aggregating approximately 630,000 square feet. The Company currently estimates that Floorcoverings' plants operate at between 35% and 85% of capacity on a six-day basis. The Company's capacity utilization in the Floorcoverings group is generally in line with its past experience in similar economic situations and the Company believes that its existing facilities are sufficient to meet both this group's existing needs and its anticipated growth requirements. The Company does not anticipate any circumstances that would render its Floorcoverings facilities inadequate for its projected needs.
WALLCOVERINGS
General
Wallcoverings, which operates under the name "Imperial", is a leading manufacturer and distributor of a full range of wallpaper for the residential and commercial sectors with 1994 net sales of $216.6 million. It is the only producer of wallpaper in the U.S. that is fully integrated from paper production through design and distribution. In addition, management believes that Imperial has a competitive advantage due to its extensive in-house design expertise and licensing arrangements, its low cost, vertically- integrated manufacturing capability, and its advanced customer ordering and service network.
The wallcoverings industry experienced significant and consistent growth from the early 1980s through 1987. This growth resulted in part from increases in new construction starts and existing home sales, which peaked during 1986 and 1987. In addition, a one-time surge in demand created a new industry-wide layer of inventory as a result of the rapid growth of large in-stock retailers. Between 1983 and 1987, the industry's physical shipment volume increased from 137 million to 200 million rolls of wallpaper per year, a 9.9% annual growth rate. Between 1987 and 1990, the industry underwent a contraction, with volume declining dramatically from 200 million rolls in 1987 to 174 million rolls in 1990, a 4.5% annual decline. This resulted from a slowdown in the overall economy, particularly in the housing
market, coupled with a reduction in inventory by overstocked retailers. From 1991 to 1994, the industry's physical shipment volume increased at a modest rate.
The wallcoverings market can generally be divided into the residential and commercial sectors with the residential sector being the larger of the two sectors. Demand for wallpaper is primarily influenced by levels of construction, renovation and remodeling. In addition to these cyclical factors, shifts in consumer taste between wallpaper and paint can be a factor. The two primary distribution channels in the residential sector are independent retailers ("dealers") and retail chains.
The industry contraction of the late 1980s and early 1990s left Imperial with unutilized manufacturing capacity, an oversized distribution network and excess product offerings. Between 1989 and 1992, Imperial implemented a comprehensive downsizing program designed to bring Imperial's high fixed-cost structure into better alignment with the changed industry environment. Imperial closed 22 showrooms and 12 warehouses and reduced fixed costs by nearly 15%. Imperial also substantially reduced the annual introduction rate of new collections and virtually eliminated its use of independent distributors in favor of exclusive captive distribution. This restructuring program improved manufacturing efficiencies, but it adversely affected sales and led to a reduction in shelf space and product market share. As a result, Imperial's sales declined during 1992 and 1993, despite what management now believes to have been a moderate upturn in industry conditions.
A new management team installed in February 1993 determined that the reduction in new collections had been too severe. Accordingly, in late 1993, management instituted a second restructuring program to bolster its new product introduction rate through aggressive product design efforts. This product line renewal led to 57 and 62 collections being introduced in 1994 and 1993, respectively, compared to 45 in 1992. Management is also broadening its selection of in-stock programs and improving its order fulfillment capabilities.
Products
Management believes Imperial has maintained its leading position in residential wallpaper due to its competitive edge in color and design. Its in-house studio of approximately 35 artists represents a major strategic investment by Imperial that is supplemented by an active licensing program under which Imperial licenses proven designs from well-known designers. Imperial is continuously introducing new designs and color concepts that supplement its already vast library.
Imperial offers a large number of well-known brand names, including Imperial, United, Sterling Prints, Katzenbach & Warren, Albert Van Luit and Plexus. In addition to these in-house brands, Imperial licenses a number of well-known brand names, including Gear, Laura Ashley, Pfaltzgraff, Croscill, Mario Buatta, David and Dash, Louis Nichole, Clarence House and Carlton Varney, for which it converts home furnishing designs into wallpaper designs. Imperial also distributes the lines of John Wilman, Great Britain's largest wallpaper designer and manufacturer.
In recent years, there has been increasing demand for wallcoverings coordinated with decorative accessories such as window treatments, bedding, upholstery fabric and other textile products. To satisfy this demand from upscale home furnishings customers, Imperial provides fabrics, which it generally purchases outside the Company, that are coordinated with its wallpaper designs. Some of these fabrics are supplied by the Mastercraft division of the Company.
In 1994, 1993 and 1992, net sales of residential wallpaper were $191.7 million, $196.0 million and $214.0 million, respectively.
Customers
Dealers and retail chains account for the largest portion of Imperial's customer base. Management believes that the Company is the leader in each of these distribution channels. Management believes that Imperial has the most extensive dealer network in the U.S., selling to approximately 15,000 dealers. Imperial also sells to many of the leading chains in the country, including Home Depot, Lowes, Sears, Sherwin Williams and Target.
Competition
As a result of the recent economic turndown in the wallcoverings industry, many weaker competitors withdrew from the U.S. wallcoverings market. In addition, further contraction is expected to occur as sales of wallcoverings shift to chain stores, which along with other retailers prefer working with fewer, larger suppliers. Management believes that Imperial is well positioned to benefit from these developments.
Competition in the wallcoverings industry is based on design, price and customer service. Imperial's principal competitors in wallpaper are Borden, GenCorp, F.S. Schumacher and Seabrook Wallcoverings.
Facilities
Imperial operates five manufacturing facilities in the United States and three in Canada, as well as three distribution centers in the United States aggregating 1.5 million square feet. Of this amount approximately 82% is owned and the remainder is leased, including the three U.S. distribution centers. The Company currently estimates that its Wallcoverings facilities that produce surface print paper generally operate at approximately 35% of capacity on a five-day basis and its facilities that produce gravure paper generally operate between approximately 80% and 100% of capacity on a five-day basis. The Company's capacity utilization in this segment is generally in line with its past experience in similar economic situations, and the Company believes that its existing facilities are sufficient to meet both this segment's existing needs and its anticipated growth requirements. The Company does not anticipate any circumstances that would render its Wallcoverings facilities inadequate for its projected needs.
RAW MATERIALS
Raw materials and other supplies used in the Company's operations are normally available from a variety of competing suppliers. The loss of a single or few suppliers would not have a material adverse effect on the Company. For a discussion of increasing raw material price trends, see page 24 of Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources in the Company's 1994 Annual Report to Stockholders which is incorporated herein by reference.
ENVIRONMENTAL MATTERS
See "ITEM 3. LEGAL PROCEEDINGS - Environmental Proceedings" and Management's Discussion and Analysis of Financial Condition and Results of Operations - Environmental Matters on pages 25-26 of the Company's 1994 Annual Report to Stockholders incorporated herein by reference.
EMPLOYEES
As of January 28, 1995, the Company's subsidiaries employed approximately 12,000 persons on a full-time or full-time equivalent basis. Approximately 2,300 of such employees are represented by labor unions. Management believes that the Company's relations with its employees and with the unions that represent certain of them are good.
ITEM 2.
ITEM 2. PROPERTIES
For information concerning the principal physical properties of the Company and its various operating divisions, see "ITEM 1. BUSINESS".
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
Except as described below, the Company and its subsidiaries are not a party to any material pending legal proceedings, other than ordinary routine litigation incidental to their businesses.
Preferred Stock Redemption Litigation. On August 2, 1991, a Fifth Consolidated Amended Complaint was filed in In re Ivan F. Boesky Securities Litigation (the "Boesky action"), a multi-district litigation pending for pre-trial purposes in the United States District Court for the Southern District of New York. In essence, the complaint is an amalgam of numerous class action and individual claims against a variety of defendants relating principally to the activities of, among others, Ivan F. Boesky, Drexel Burnham Lambert Incorporated and Michael R. Milken. Among other things, the complaint alleges that these defendants and various named associates, along with Collins & Aikman Group, Inc. ("Group"), a former wholly owned subsidiary of the Company, which was merged into Collins & Aikman Products Co. ("Products"), a wholly owned subsidiary of the Company, and certain former officers and directors of Group, conspired to manipulate the price of Group's common stock in April 1986 for the purpose of triggering a redemption of outstanding preferred stock of Group issued in an April 24, 1985 public offering (the "Preferred Stock"). The complaint alleges claims for compensatory and punitive damages in unspecified amounts against Group and the individual Group-related defendants for fraud and deceit, breach of fiduciary duty, unjust enrichment and violations of Section 25400 of the California Corporations Code. It does so on behalf of a certified class of persons and entities who, during the period of April 23, 1986 through June 2, 1986, redeemed, converted or sold shares of the Preferred Stock. The complaint also alleges numerous other claims not involving Group or its former officers and directors. The factual allegations in the complaint involving Group are substantially similar to the allegations set forth in Citron v. Wickes Companies, Inc., et al., and Weinberger v. Wickes Companies, Inc., et al., two actions previously filed in the Superior Court of the State of California for the County of Los Angeles which have been stayed in favor of the Boesky action. On February 27, 1995, plaintiffs made a motion to "clarify or amend the Fifth Amended Complaint, essentially seeking either (i) a declaration that the complaint asserted claims against Group under Section 10(b) of the Securities Exchange Act and the Racketeer Influenced Corrupt Organizations Act (RICO); or (ii) the right to amend the complaint to assert those claims. On April 24, 1995, the court granted plaintiffs motion to the extent of permitting plaintiffs to amend the complaint to assert Section 10(b) and RICO claims against Group and the individual Group-related defendants.
POF Arbitration. On or about May 26, 1992, Advanced Development & Engineering Centre ("ADEC"), a division of an indirect subsidiary of Group, filed a request for arbitration with the International Chamber of Commerce seeking a resolution of ADEC's dispute with the Pakistan Ordnance Factories Board ("POF") concerning ADEC's installation of a munitions facility in Pakistan for a purchase price of $26.5 million. ADEC alleges that POF violated the contract, among other things, by refusing to permit completion of a production run, which would have entitled ADEC to receive $2.65 million, the remaining unpaid portion of the purchase price under the contract. On August 6, 1992, POF filed a reply and counterclaim alleging that as a result of ADEC's alleged breach of the contract, POF's entire investment in the munitions facility was a loss. POF claims damages in excess of $30 million.
Insurance Coverage Litigation. On November 22, 1994, Products was served with a complaint filed by National Union Fire Insurance Company of Pittsburgh, PA ("National Union") in the United States District Court for the Central District of California (the "California
action"). The complaint seeks declaratory relief and the return of approximately $10 million paid by National Union in defense costs and indemnity in respect of a class action, captioned Glass, Molders, Pottery, Plastics and Allied Workers International Union, AFL-CIO et al. v. Wickes Companies, Inc. (the "OCF Action"), which was commenced against Wickes Companies, Inc. (the predecessor by merger to Products) in or about July 1988 and settled pursuant to an order entered in or about October 1993. The complaint by National Union alleges, among other things, that National Union did not have a duty to defend or indemnify Wickes and that Wickes was unjustly enriched. On November 21, 1994, Products filed suit against National Union in the United States District Court for the Southern District of New York (the "New York action") seeking declaratory relief and damages relating to the amounts paid by National Union in respect of the OCF Action. Both the California action and the New York action have been withdrawn. In accordance with a settlement agreement dated as of January 17, 1995, the parties exchanged mutual releases of all claims related to either the California or New York action, and Products agreed to pay National Union a total of $2,510,000 of which $510,000 is due in 1995; $1,000,000 is due in 1996; and the remaining $1,000,000 is due in 1997. The settlement is covered by established accruals.
In the opinion of the Company's management based on the facts presently known to it, the ultimate outcome of any of these legal proceedings will not have a material effect on the Company's consolidated financial condition or future results of operations.
Environmental Proceedings
Douglas, Michigan. On January 4, 1991, a complaint was filed in the Circuit Court for Allegan County, Michigan, captioned Haworth, Inc. v. Wickes Manufacturing Company (the "Haworth action"), in which Haworth, Inc. ("Haworth") alleges that predecessors of Wickes Manufacturing Company ("Wickes Manufacturing"), an indirect wholly owned subsidiary of the Company, released environmental contaminants on property, now owned by Haworth, located in the Village of Douglas, Michigan. Haworth seeks a declaratory judgment that Wickes Manufacturing is liable for the alleged contamination of the site, indemnification for any costs incurred or to be incurred in connection with the alleged contamination, an affirmative injunction requiring Wickes Manufacturing to implement response actions at the site, damages in connection with alleged diminution in value of the subject property, and other damages, interest, and costs, all in unspecified amounts. Wickes Manufacturing has filed counterclaims against Haworth. On June 28, 1993, the Court entered an order granting Wickes Manufacturing's motion for summary disposition dismissing all of Haworth's claims against Wickes Manufacturing. On July 19, 1993, Haworth appealed the Court's order. On April 21, 1995, the Court of Appeals for the State of Michigan affirmed the Trial Court s order granting Wickes Manufacturing's motion for summary disposition. On October 22, 1993, Haworth filed a complaint in the United States District Court for the Western District of Michigan, captioned Haworth, Inc. v. Wickes Manufacturing Company and Paramount Communications, Inc. (the "Second Haworth action"). In the Second Haworth action, Haworth alleges federal and state law claims with respect to Wickes Manufacturing and Paramount Communications Inc. that are factually similar to the state law claims alleged in the Haworth action, and Haworth seeks relief similar to the relief it seeks in the Haworth action. The Michigan Department of Natural Resources, by letter dated December 20, 1989, notified Wickes Manufacturing pursuant to the Michigan Environmental Response Act that Wickes Manufacturing is potentially responsible for undertaking investigation and response actions to address contamination at the site involved in the Haworth action and its possible effect on the water supply of the Village of Douglas.
North Smithfield, Rhode Island. On May 23, 1988, a complaint was filed in the United States District Court for the District of Rhode Island, captioned United States v. Kayser-Roth Corporation and Hydro-Manufacturing, Inc. (the "Stamina Mills action"), in which the United States sought to recover response costs under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") from Group's former Kayser-Roth Corporation subsidiary ("Kayser-Roth") and others in connection with a site formerly operated
by Stamina Mills, Inc., a former subsidiary of Kayser-Roth, in North Smithfield, Rhode Island. In January 1990, the District Court held Kayser-Roth liable under CERCLA for all past and future response costs. By Amended Administrative Order issued June 4, 1991, the United States Environmental Protection Agency (the "EPA") directed Kayser-Roth to implement the remedies set forth in its Record of Decision issued September 18, 1990. Since the beginning of fiscal 1991 to date, Kayser-Roth has paid approximately $3.6 million for past response costs, prejudgment interest and remediation. Kayser-Roth is in the process of complying with the remainder of the order. The Company has agreed to indemnify Kayser-Roth with respect to this matter.
Miscellaneous Environmental Matters. In addition to the judicial and administrative proceedings listed above, the Company also is legally or contractually responsible or alleged to be responsible for the investigation and remediation of contamination at various other sites. It also has received notices that it is a potentially responsible party ("PRP") in a number of proceedings. It is a normal risk of operating a manufacturing business that liability may be incurred for investigating and remediating on-site and off-site contamination. The Company is currently engaged in or alleged to be responsible for investigation or remediation at certain sites. These sites include, among others, the following: a site adjacent to a facility formerly operated by Wickes Manufacturing's former Bohn Heat Transfer division located at Beardstown, Illinois; a site formerly owned and operated by Wickes Manufacturing's alleged former Daybrook Ottawa division located at Bowling Green, Ohio; a site owned and formerly operated by the Company located at Elmira, California; the Beaunit Corporation Superfund Site located near Fountain Inn, South Carolina; the Butterworth Landfill Superfund Site located at Grand Rapids, Michigan; a site owned and formerly operated by Wickes Manufacturing's former Mechanical Components division located at Mancelona, Michigan; the former Albert Van Luit plant site owned by a Company subsidiary located in North Hollywood, California; the Hartley & Hartley landfill site located at Kawkawlin, Michigan; and the Stringfellow Superfund Site located at Riverside County, California. In addition to the environmental sites and proceedings listed above, the Company is and has been a party or PRP at other sites and involved in other proceedings from time to time. In the last three fiscal years, the Company has paid approximately $6.3 million in the aggregate (excluding amounts paid in connection with the Stamina Mills action disclosed above) in connection with its various environmental sites. The majority of such costs have been incurred in connection with the Elmira, California and North Hollywood, California sites.
In estimating the total future cost of investigation and remediation, the Company has considered, among other things, the Company's prior experience in remediating contaminated sites, remediation efforts by other parties, data released by the EPA, the professional judgment of the Company's environmental experts, outside environmental specialists and other experts, and the likelihood that other parties which have been named as PRPs will have the financial resources to fulfill their obligations at sites where they and the Company may be jointly and severally liable. Under the scheme of joint and several liability, the Company could be liable for the full costs of investigation and remediation even if additional parties are found to be responsible under the applicable laws. It is difficult to estimate the total cost of investigation and remediation due to various factors including incomplete information regarding particular sites and other PRP's, uncertainty regarding the extent of environmental problems and the Company's share, if any, of liability for such problems, the selection of alternative compliance approaches, the complexity of environmental laws and regulations and changes in cleanup standards and techniques. When it has been possible to provide reasonable estimates of the Company's liability with respect to environmental sites, provisions have been made in accordance with generally accepted accounting principles. The Company records its best estimate when it believes it is probable that an environmental liability has been incurred and the amount of loss can be reasonably estimated. The Company also considers estimates of certain reasonably possible environmental liabilities in determining the aggregate amount of environmental reserves. As of January 28, 1995, the Company has established reserves of approximately $31.7 million for the estimated future
costs related to all its known environmental sites. In the opinion of management, based on the facts presently known to it, the environmental costs and contingencies will not have a material adverse effect on the Company's consolidated financial condition or results of operations. However, there can be no assurance that the Company has identified or properly assessed all potential environmental liability arising from the activities or properties of the Company, its present and former subsidiaries and their corporate predecessors.
The Company is seeking insurance coverage for a portion of the defense costs and liability it has incurred and may incur in connection with the environmental proceedings described above. Coverage issues have not been resolved. There can be no assurance that any coverage will be provided.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT (Pursuant to Instruction G(3) of the General Instructions to Form 10-K, the following information is included herein as an unnumbered item in lieu of being included in the Company's definitive Proxy Statement).
The following is a list of the names and ages (as of April 28, 1995) of all the executive officers of the Company and a description of all positions and offices with the Company held by each such person and each such person's principal occupations and employment during the past five years. All executive officers hold office at the pleasure of the Company's Board of Directors.
Name Age Position
David A. Stockman 48 Co-Chairman of the Board
Bruce Wasserstein 47 Co-Chairman of the Board
Randall J. Weisenburger 36 Vice Chairman
John P. McNicholas 32 Vice Chairman
Thomas E. Hannah 56 Chief Executive Officer
William J. Brucchieri 52 President of Imperial Wallcoverings
John D. Moose 58 President of Automotive Bodycloth Division
Harry F. Schoen III 59 President of Mastercraft Division
Elizabeth R. Philipp 38 Executive Vice President, General Counsel and Secretary
J. Michael Stepp 51 Executive Vice President and Chief Financial Officer
David A. Stockman has been Co-Chairman of the Board of the Company since July 1993. Mr. Stockman has been a General Partner of The Blackstone Group Holdings L.P. (the "Blackstone Group") since 1988. Mr. Stockman is also a director of Edward J. DeBartolo Corporation.
Bruce Wasserstein has been Co-Chairman of the Board of the Company since June 1992. Mr. Wasserstein has been Chairman and Chief Executive Officer of Wasserstein Perella Management Partners, Inc. ("WP Management") since June 1992 and Chief Executive Officer and Chairman or President, Wasserstein Perella Group, Inc. ("WP Group") since 1988. Mr. Wasserstein is Chairman of the Board of Maybelline, Inc.
Randall J. Weisenburger has been a director of the Company since August 1989 and Vice Chairman of the Company since April 1994. Mr. Weisenburger was Deputy Chairman of the Company from July 1992 to April 1994 and Vice President from August 1989 to July 1992. Mr. Weisenburger has been Managing Director of Wasserstein Perella & Co., Inc. ("WP & Co.") since December 1993. Mr. Weisenburger was a Director of WP & Co. from December 1992 to December 1993 and a Vice President of WP & Co. from December 1989 to December 1992. Mr. Weisenburger is also Vice Chairman of the Board of Maybelline, Inc. and Chairman of the Yardley Lentheric Group.
John P. McNicholas has been Vice Chairman of the Company since April 1994. Mr. McNicholas was Deputy Chairman of the Company from July 1992 to April 1994. Mr. McNicholas has been Vice President of the Blackstone Group since January 1992 and was an Associate of the Blackstone Group from November 1990 to December 1991 and an Associate, Merchant Banking Group - Merrill Lynch Capital Markets from August 1989 to November 1990.
Thomas E. Hannah, has been a director of the Company and Chief Executive Officer of the Company since July 1994. Mr. Hannah was President and Chief Executive Officer of Collins & Aikman Textile and Wallcoverings Group, a division of a wholly owned subsidiary of the Company, from November 1991 until July 1994 and was named an executive officer of the Company for purposes hereof in April 1993. Mr. Hannah was President and Chief Executive Officer of the Collins & Aikman Textile Group from February 1989 to November 1991 and President of Milliken & Company's Finished Apparel Division prior to that.
William J. Brucchieri has been President of Imperial Wallcoverings since February 1993 and was named an executive officer of the Company for purposes hereof in April 1994. Mr. Brucchieri was Executive Vice President of Imperial from March 1992 to January 1993 and Executive Vice President of the Mastercraft division from January 1990 to February 1992. Mr. Brucchieri was Vice President, Operations of the Mastercraft division from August 1989 to January 1990. Mr. Brucchieri joined a wholly owned subsidiary of the Company in 1988.
John D. Moose has been President of the Automotive Bodycloth division since October 1994 and was President of the North American Auto Group from June 1989 until October 1994. Mr. Moose was named an executive officer of the Company for purposes hereof in April 1994. Mr. Moose joined a wholly owned subsidiary of the Company in 1960.
Harry F. Schoen III has been President of the Mastercraft division since January 1993 and was named an executive officer of the Company for purposes hereof in April 1994. Mr. Schoen was Executive Vice President and Chief Operating Officer of the Mastercraft division from April 1992 to December 1992. Mr. Schoen was General Manager of Milliken & Company's Greige Fine Goods Group prior to that.
Elizabeth R. Philipp has been Executive Vice President, General Counsel and Secretary of the Company since April 1994. Ms. Philipp was Vice President, General Counsel and Secretary of the Company from April 1993 to April 1994 and Vice President and General Counsel from September 1990 to April 1993. Prior to that, Ms. Philipp was associated with the law firm of Cravath, Swaine and Moore.
J. Michael Stepp has been Executive Vice President and Chief Financial Officer since April 1995. Mr. Stepp was Executive Vice President, Chief Financial Officer of Purolator Products Company from December 1992 to March 1995. Prior to that, Mr. Stepp was President of American Corporate Finance Group, Inc.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock has been traded on the New York Stock Exchange under the symbol "CKC" since July 13, 1994. At April 26, 1995, there were approximately 125 holders of record. The following table lists the high and low sales prices for the common stock for the full quarterly periods since trading commenced.
Fiscal 1994
High Low Third Quarter 10-7/8 8-5/8 Fourth Quarter 9-1/4 7-7/8
No dividend or other distribution with respect to the Common Stock has been paid by the Company since its incorporation in 1988. Any payment of future dividends and the amounts thereof will be dependent upon the Company's earnings, financial requirements and other factors deemed relevant by the Company's Board of Directors. The Company currently does not intend to pay any cash dividends in the foreseeable future; rather, the Company intends to retain earnings to provide for the operation and expansion of its business. Certain restrictive covenants contained in the agreement governing the Company's credit facilities limit the Company's ability to make dividend and other payments. See Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources on pages 22-23 of the Company's 1994 Annual Report to Stockholders incorporated herein by reference.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is incorporated by reference to page 16 of the Company's 1994 Annual Report to Stockholders.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required by this Item is incorporated by reference to pages 17 through 26 of the Company's 1994 Annual Report to Stockholders.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is incorporated by reference to pages 27 through 54 of the Company's 1994 Annual Report to Stockholders.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by Item 401 of Regulation S-K regarding executive officers is set forth in Part I hereof under the caption "Executive Officers of the Registrant" and the information required by Item 401 of Regulation S-K regarding directors is incorporated herein by reference to that portion of the Registrant's definitive Proxy Statement to be used in connection with its 1995 Annual Meeting of Stockholders, which will be filed in final form with the Commission not later than 120 days after January 28, 1995 (the "Proxy Statement"), captioned "Election of Directors--Information as to Nominees and Other Directors". 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 the Company's knowledge, in the Proxy Statement.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference to that portion of the Proxy Statement captioned "Executive Compensation".
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated herein by reference to those portions of the Proxy Statement captioned "Voting Securities and Principal Stockholders" and "Election of Directors--Information as to Nominees and Other Directors".
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated herein by reference to that portion of the Proxy Statement captioned "Compensation Committee Interlocks and Insider Participation".
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) Financial Statements:
The following Consolidated Financial Statements of Collins & Aikman Corporation and Report of Independent Public Accountants are incorporated by reference to pages 27 through 54 of the Registrant's 1994 Annual Report to Stockholders:
Report of Independent Public Accountants
Consolidated Statements of Operations for the fiscal years ended January 28, 1995, January 29, 1994 and January 30, 1993
Consolidated Balance Sheets at January 28, 1995 and January 29, 1994
Consolidated Statements of Cash Flows for the fiscal years ended January 28, 1995, January 29, 1994 and January 30, 1993
Consolidated Statements of Common Stockholders' Deficit for the fiscal years ended January 28, 1995, January 29, 1994 and January 30, 1993
Notes to Consolidated Financial Statements
(a) (2) Financial Schedules:
The following financial statement schedules of Collins & Aikman Corporation for the fiscal years ended January 28, 1995, January 29, 1994 and January 30, 1993 are filed as part of this Report and should be read in conjunction with the Consolidated Financial Statements of Collins & Aikman Corporation.
Page Number
Report of Independent Public Accountants on Schedules . . . . . . . . S-1 Schedule I-Condensed Financial Information of the Registrant . . . . S-2 Schedule II-Valuation and Qualifying Accounts . . . . . . . . . . . S-5
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are omitted because they are not required, are inapplicable, or the information is included in the Consolidated Financial Statements or Notes thereto.
(a) (3) Exhibits:
Please note that in the following description of exhibits, the title of any document entered into, or filing made, prior to July 7, 1994 reflects the name of the entity a party thereto or filing, as the case may be, at such time. Accordingly, documents and filings described below may refer to Collins & Aikman Holdings Corporation, Collins & Aikman Group, Inc. or Wickes Companies, Inc., if such documents and filings were made prior to July 7, 1994.
Exhibit Number Description
3.1- Restated Certificate of Incorporation of Collins & Aikman Corporation is hereby incorporated by reference to Exhibit 4.1 of Collins & Aikman Corporation's Report on Form 10-Q for the fiscal quarter ended July 30, 1994.
3.2- By-Laws of Collins & Aikman Corporation, as amended, are hereby incorporated by reference to Exhibit 4.2 of Collins & Aikman Corporation's Report on Form 10-Q for the fiscal quarter ended July 30, 1994.
4.1- Specimen Stock Certificate for the Common Stock is hereby incorporated by reference to Exhibit 4.3 of Amendment No. 3 to Collins & Aikman Holdings Corporation's Registration Statement on Form S-2 (Registration No. 33- 53179) filed June 21, 1994.
4.2- Indenture dated as of May 1, 1985, pursuant to which 11 3/8% Usable Subordinated Debentures due 1997 of Collins & Aikman Products Co. (the successor by merger to Collins & Aikman Group, Inc. and Wickes Companies, Inc.) were issued is hereby incorporated by reference to Exhibit 4(f) of Wickes Companies, Inc.'s Current Report on Form 8-K dated May 21, 1985 (SEC File No. 1-6761).
4.3- Credit Agreement dated as of June 22, 1994 between Collins & Aikman Products Co. (formerly Collins & Aikman Corporation) as Borrower, WCA Canada Inc., as Canadian Borrower, the Company, as Guarantor, the lenders named therein, Continental Bank, N.A., and NationsBank, N.A. as Managing Agents, and Chemical Bank as Administrative Agent is hereby incorporated by reference to Exhibit 4.5 of Collins & Aikman Corporation's Report on Form 10-Q for the fiscal quarter ended July 30, 1994.
4.4- First Amendment dated as of January 30, 1995 to the Credit Agreement dated as of June 22, 1994 among Collins & Aikman Products Co., WCA Canada Inc., Collins & Aikman Corporation, the financial institutions party thereto and Chemical Bank, as administrative agent.
Collins & Aikman Corporation agrees to furnish to the Commission upon request in accordance with Item 601(b)(4)(iii)(A) of Regulation S-K copies of instruments defining the rights of holders of long-term debt of Collins & Aikman Corporation or any of its subsidiaries, which debt does not exceed 10% of the total assets of Collins & Aikman Corporation and its subsidiaries on a consolidated basis.
10.1- Amended and Restated Stockholders Agreement dated as of June 29, 1994 among the Company, Collins & Aikman Group, Inc., Blackstone Capital Partners L.P. and Wasserstein Perella Partners, L.P.
10.2- Employment Agreement dated as of July 18, 1990 between Wickes Companies, Inc. and an executive officer is hereby incorporated by reference to Exhibit 10.3 of Wickes Companies, Inc.'s Report on Form 10-K for the fiscal year ended January 26, 1991.*
* Management contract or compensatory plan or arrangement required to be filed as an exhibit to this form pursuant to Item 14 (c) of this report.
Exhibit Number Description
10.3 - Letter Agreement dated as of May 16, 1991 and Employment Agreement dated as of July 22, 1992 between Collins & Aikman Corporation and an executive officer is hereby incorporated by reference to Exhibit 10.7 of Collins & Aikman Holdings Corporation's Report on Form 10-K for the fiscal year ended January 30, 1993.*
10.4 - First Amendment to Employment Agreement dated as of February 24, 1994 between Collins & Aikman Corporation and an executive officer is hereby incorporated by reference to Exhibit 10.7 of Collins & Aikman Holdings Corporation's Registration Statement on Form S-2 (Registration No. 33- 53179) filed April 19, 1994.*
10.5 - Letter Agreement dated as of May 16, 1991 between Collins & Aikman Corporation and an executive officer is hereby incorporated by reference to Exhibit 10.14 of Collins & Aikman Holdings Corporation's Registration Statement on Form S-2 (Registration No. 33-53179) filed April 19, 1994.*
10.6 - Employment Agreement dated as of March 23, 1992 between Collins & Aikman Group, Inc. and a former executive officer is hereby incorporated by reference to Exhibit 10.6 of Collins & Aikman Holdings Corporation's Report on Form 10-K for the fiscal year ended January 30, 1993.*
10.7 - First Amendment dated as of April 4, 1994 to Agreement dated as of March 23, 1992 between Collins & Aikman Group, Inc. and a former executive officer is hereby incorporated by reference to Exhibit 10.14 of Collins & Aikman Holdings Corporation's Report on Form 10-K for the fiscal year ended January 29, 1994.*
10.8 - Lease, executed as of the 1st day of June 1987, between Dura Corporation and Dura Acquisition Corp. is hereby incorporated by reference to Exhibit 10.24 of Amendment No.5 to Collins & Aikman Holdings Corporation's Registration Statement on Form S-2 (Registration No. 33-53179) filed July 6, 1994.
10.9 - Agreement dated as of October 17, 1994 among Collins & Aikman Products Co. and a former executive officer is hereby incorporated by reference to Exhibit 10.29 of Collins & Aikman Corporation's Report on Form 10-Q for the fiscal quarter ended October 29, 1994.*
10.10 - The Wickes Equity Share Plan is hereby incorporated by reference to Exhibit 10.11 of Collins & Aikman Holdings Corporation's Report on Form 10-K for the fiscal year ended January 30, 1993.*
10.11 - Collins & Aikman Corporation 1994 Executive Incentive Compensation Plan is hereby incorporated by reference to Exhibit 10.22 of Amendment No. 4 to Collins & Aikman Holdings Corporation's Registration Statement on Form S-2 (Registration No. 33-53179) filed June 27, 1994.*
10.12 - Collins & Aikman Corporation Supplemental Retirement Income Plan is hereby incorporated by reference to Exhibit 10.23 of Amendment No. 5 to Collins & Aikman Holdings Corporation's Registration Statement on Form S-2 (Registration No. 33-53179) filed July 6, 1994.*
* Management contract or compensatory plan or arrangement required to be filed as an exhibit to this form pursuant to Item 14 (c) of this report.
Exhibit Number Description
10.13 - 1993 Employee Stock Option Plan is hereby incorporated by reference to Exhibit 10.12 of the Registration Statement on Form S-2 of Collins & Aikman Holdings Corporation (File No. 33-53179) filed April 19, 1994.*
10.14 - 1994 Employee Stock Option Plan is hereby incorporated by reference to Exhibit 10.13 of the Registration Statement on Form S-2 of Collins & Aikman Holdings Corporation (File No. 33-53179) filed April 19, 1994.*
10.15 - 1994 Directors Stock Option Plan.*
10.16 - Acquisition Agreement dated as of November 22, 1993 as amended and restated as of January 28, 1994, among Collins & Aikman Group, Inc., Kayser-Roth Corporation and Legwear Acquisition Corporation is hereby incorporated by reference to Exhibit 2.1 of Collins & Aikman Holdings Corporation's Current Report on Form 8-K dated February 10, 1994.
10.17 - Warrant Agreement dated as of January 28, 1994 by and between Collins & Aikman Group, Inc. and Legwear Acquisition Corporation is hereby incorporated by reference to Exhibit 10.20 of Collins & Aikman Holdings Corporation's Report on Form 10-K for the fiscal year ended January 29, 1994.
10.18 - Amended and Restated Receivables Sale Agreement dated as of March 30, 1995 among Collins & Aikman Products Co., Ack-Ti-Lining, Inc., WCA Canada Inc., Imperial Wallcoverings, Inc., The Akro Corporation, Dura Convertible Systems Inc., each of the other subsidiaries of Collins & Aikman Products Co. from time to time parties thereto and Carcorp, Inc.
10.19 - Servicing Agreement, dated as of March 30, 1995, among Carcorp, Inc., Collins & Aikman Products Co., as Master Servicer, each of the subsidiaries of Collins & Aikman Products Co. from time to time parties thereto and Chemical Bank, as Trustee.
10.20 - Pooling Agreement, dated as of March 30, 1995, among Carcorp, Inc., Collins & Aikman Products Co., as Master Servicer and Chemical Bank, as Trustee.
10.21 - Series 1995-1 Supplement, dated as of March 30, 1995, among Carcorp, Inc., Collins & Aikman Products Co., as Master Servicer and Chemical Bank, as Trustee.
10.22 - Series 1995-2 Supplement, dated as of March 30, 1995, among Carcorp, Inc., Collins & Aikman Products Co., as Master Servicer, the Initial Purchasers parties thereto, Societe Generale, as Agent for the Purchasers and Chemical Bank, as Trustee.
10.23 - Master Equipment Lease Agreement dated as of September 30, 1994, between NationsBanc Leasing Corporation of North Carolina and Collins & Aikman Products Co. Is hereby incorporated by reference to Exhibit 10.27 of Collins & Aikman Corporation's Report on Form 10-Q for the fiscal quarter ended October 29, 1994.
* Management contract or compensatory plan or arrangement required to be filed as an exhibit to this form pursuant to Item 14 (c) of this report.
Exhibit Number Description
10.24 - Employment Agreement dated as of April 6, 1995 between Collins & Aikman Products Co. and an executive officer.*
10.25 - Excess Benefit Plan of Collins & Aikman Corporation.*
11 - Computation of Earnings Per Share.
13 - Pages 16-54 of Collins and Aikman Corporation s 1994 Annual Report to Stockholders.
21 - List of subsidiaries of Collins & Aikman Corporation.
23 - Consent of Arthur Andersen LLP.
27 - Financial Data Schedule.
99 - Voting Agreement between Blackstone Capital Partners L.P. and Wasserstein Perella Partners, L.P. is hereby incorporated by reference to Exhibit 99 of Amendment No.4 to Collins & Aikman Holdings Corporation's Registration Statement on Form S-2 (Registration No. 33-53179) filed June 27, 1994.
* Management contract or compensatory plan or arrangement required to be filed as an exhibit to this form pursuant to Item 14 (c) of this report.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the last quarter of the fiscal year for which this report on Form 10-K was filed.
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, on the 28th day of April, 1995.
COLLINS & AIKMAN CORPORATION
By: /s/ David A. Stockman By: /s/ Bruce Wasserstein David A. Stockman Bruce Wasserstein Co-Chairman of the Board of Directors Co-Chairman of the Board of Directors
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.
Signature Title Date
/s/ David A. Stockman Co-Chairman of the April 28, 1995 David A. Stockman Board of Directors
/s/ Bruce Wasserstein Co-Chairman of the April 28, 1995 Bruce Wasserstein Board of Directors
/s/ Thomas E. Hannah Director and Chief Executive April 28, 1995 Thomas E. Hannah Officer (Principal Executive Officer)
/s/ Randall J. Weisenburger Vice Chairman and Director April 28, 1995 Randall J. Weisenburger
/s/ J. Michael Stepp Executive Vice President and April 28, 1995 J. Michael Stepp Chief Financial Officer (Principal Financial Officer)
/s/ Anthony Hardwick Vice President and Controller April 28, 1995 Anthony Hardwick (Principal Accounting Officer)
/s/ Robert C. Clark Director April 28, 1995 Robert C. Clark
/s/ James J. Mossman Director April 28, 1995 James J. Mossman
/s/ Stephen A. Schwarzman Director April 28, 1995 Stephen A. Schwarzman
/s/ W. Townsend Ziebold, Jr. Director April 28, 1995 W. Townsend Ziebold, Jr.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES
To Collins & Aikman Corporation:
We have audited, in accordance with generally accepted auditing standards, the consolidated financial statements included in Collins & Aikman Corporation's annual report to stockholders incorporated by reference in this Form 10-K, and have issued our report thereon dated March 23, 1995, except with respect to the refinancing of the receivables facility discussed in Note 23 to the consolidated financial statements, as to which the date is March 31, 1995. Our audits were made for the purpose of forming an opinion on those statements taken as a whole. The schedules listed in Item 14 of this Form 10-K are the responsibility of the Company's management and are presented for purposes of complying with the Securities and Exchange Commission's rules and are not part of the basic financial statements. These schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, fairly state in all material respects the financial data required to be set forth therein in relation to the basic financial statements taken as a whole.
ANDERSEN ARTHUR LLP
Charlotte, North Carolina, March 23, 1995.
S-1
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT Condensed Balance Sheets (in thousands)
S-2
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT Condensed Statements of Operations (in thousands)
S-3
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT Condensed Statements of Cash Flows (in thousands)
Notes to Condensed Financial Statements
1. Presentation:
These condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and notedisclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. For disclosures regarding redeemable preferred stock and commitments and contingencies, see Notes 15 and 21, respectively, to Consolidated Financial Statements incorporated by reference to pages 27 through 54 of the Registrant's 1994 Annual Report to Stockholders.
2. Long-Term Debt:
Long-term debt as of January 29, 1994 consisted of Subordinated PIK Bridge Notes. For additional disclosures regarding long-term debt, see Note 9 to Consolidated Financial Statements incorporated by reference to pages 27 through 54 of the Registrant's 1994 Annual Report to Stockholders
3. See Notes to Consolidated Financial Statements for additional disclosures.
S-4
(a) The fiscal year ended January 30, 1993 has been restated to exclude amounts related to discontinued operations. (b) Reclassification and collection of accounts previously written off.
(c) Reclassifications and uncollectible amounts written off.
S-5