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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
[Fee Required]
For the fiscal year ended July 1, 1995
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 _____________________
Commission File No. 0-8544
SPEIZMAN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 56-0901212
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
508 West Fifth Street, Charlotte, North Carolina 28202
(Address of principal executives offices) (Zip Code)
Registrant's telephone number, including area code: (704) 372-3751
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 Par Value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all
reports required 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 filing such requirements for the past 90 days.
Yes [(Check Mark)] 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
or any amendment of this Form 10-K.
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of September 14, 1995, was $9,462,064, based on the last
sale price of $3.75 per share reported by the NASDAQ National Market System
on that date.
As of September 14, 1995, there were 3,208,599 shares of the
registrant's Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Proxy Statement for its Annual Meeting
of Stockholder to be held on November 16, 1995, are incorporated herein by
reference into Part III.
PART I
Item 1. Business.
General
Speizman Industries, Inc. (the "Company") is the leading
distributor of new sock knitting machines in the United States. It
distributes technologically advanced sock knitting machines
manufactured by Lonati, S.r.l., Brescia, Italy ("Lonati"), which the
Company believes is the world's largest manufacturer of hosiery
knitting equipment. It also distributes Lonati sock and sheer hosiery
knitting machines in Canada. In addition, through sales
arrangements with other European textile machinery manufacturers, the
Company distributes other sock knitting machines, knitting machines
for underwear, sweaters, collars and trim, and other knitted fabrics
and other equipment related to the manufacture of socks and sheer
hosiery, principally in the United States and Canada. The Company
also sells dyeing and finishing equipment for the textile industry. The
Company sells textile machine parts and used textile equipment in the
United States and a number of foreign countries.
Prior to 1990, the Company also manufactured mechanical
single cylinder sock knitting machines. In 1990, the Company ceased
its manufacturing activities due to a decline in the profitability
of this line of business and in order to focus the Company's activities
on the distribution of single cylinder machines manufactured by Lonati.
All references herein are to the Company's 52-or-53 week
fiscal year ending on the Saturday closest to June 30. Fiscal 1995,
1994, 1992, and 1991, each contained 52 weeks and ended on July, 1,
1995, July 2, 1994, June 27, 1992 and June 29, 1991. Fiscal 1993
contained 53 weeks and ended on July 3, 1993. Unless the context
otherwise requires, the term the "Company" as used herein includes
Speizman Industries, Inc. and its subsidiaries.
The Company and Lonati entered into their present
agreement for the sale of Lonati machines in the United States in
January 1992 (the "Lonati Agreement"). The Company and Lonati also
entered into a similar agreement in January 1992 relating to the
Company's distribution of Lonati sock and sheer hosiery knitting
machines in Canada. The company has distributed Lonati double cylinder
machines in the United States continuously since 1982. The Company
began distributing Lonati single cylinder machines in 1989.
Pursuant to the Lonati Agreement, Lonati has appointed the
Company as Lonati's exclusive agent in the United States for the sale
of its range of single and double cylinder sock knitting machines as
of the date of the Lonati Agreement and related spare parts. Under
the Lonati Agreement, the Company also serves as the distributor of
such equipment in the United States. Although the Lonati Agreement
does not establish the Company as the exclusive distributor of Lonati
sock machines in the United States, the Company in fact has
exclusively distributed Lonati double cylinder sock machines
continuously since 1982 and Lonati single cylinder sock knitting
machines since 1989 when the Company began to phase out its
manufacturing activities. The Lonati Agreement extends to December
31, 1995 and continues from year to year thereafter, although it may
be terminated on 90 days written notice at any year end or without
notice in the event of a breach. The Company and Lonati also entered
into a similar agreement in January 1992 relating to the Company's
distribution of Lonati sock and sheer hosiery knitting machines in
Canada.
The Lonati Agreement contains certain covenants and
conditions relating to the Company's sale of Lonati machines,
including, among others, requirements that the Company, at its
own expense, promote the sale of Lonati machines and assist Lonati in
maintaining its competitive position, maintain an efficient sales
staff, provide for the proper installation and servicing of the
machines, maintain an adequate inventory of parts and pay for all
costs of advertising the machines. The Company is prohibited during
the term of the Lonati Agreement from distributing any machines or parts
that compete with Lonati machines and parts. The Company believes that
it is and will remain in compliance in all material respects with such
covenants. The cost to the Company of Lonati machines, as well as the
delivery schedule of these machines, are totally at the discretion of
Lonati. The Lonati Agreement allows Lonati to sell machines directly
to the sock manufacturer with any resulting commission paid to the
Company determined on a case by case basis.
1
The Lonati single cylinder machines distributed by the
Company are for the knitting of athletic socks. The Lonati double
cylinder machines are for the knitting of dress and casual socks. The
Lonati machines are electronic and high-speed and have computerized
controls. Lonati single cylinder machines are capable of knitting
pouch heel and toe, reciprocated heel and toe and tube socks.
These and other features allow the rapid change of sock design,
style and size, result in increased production volume and efficiency
and simplify the servicing of the machines. The Company distributes
these sock knitting machines as well as Lonati sheer hosiery
knitting machines in Canada. In addition, the Company distributes the
knitting machines, described below, manufactured by Santoni,
S.r.l. Brescia, Italy ("Santoni"), one of Lonati's subsidiaries, in the
United States and Canada. Sales by the company in the United
States and Canada of machines manufactured by Lonati, S.r.l., generated
the following percentages of the Company's net revenues: 44.4%
in 1995, 65.6% in 1994 and 66.7% in 1993. In addition, sales of
Santoni machines in the United States and Canada generated 9.3%, 4.4%
and 5.4% of the Company's net revenues in fiscal 1995, 1994 and 1993,
respectively.
In addition to the Lonati machines, the Company distributes
new knitting and other machines and equipment under written agreements
and other arrangements with the manufacturers. The following table sets
forth certain information concerning certain of these additional
distribution arrangements:
Manufacturer Machine Territory
Santoni, S.r.l., Circular knitting machines for United States and
Brescia, Italy underwear, men's socks and women's Canada
sheer hosiery and surgical support hose
Jumberca, S.A., Sweater knitting machines United States, Canada, the United
Badalona, Spain Kingdom and Ireland
Zamark, S.p.A.. Flat knitting machines for collars and United States, Canada, the United
Somma Lombardo, Italy trim and sweaters Kingdom and Ireland
Conti Complett, S.p.A., Sock toe closing machines and sock United States
Milan, Italy turning devices
Sperotto Rimar, S.p.A., Fabric processing and finishing United States
Malo, Italy machines
Corino Machine, S.r.l., Fabric handling equipment United States and Canada
Alba, Italy
Fimatex, Turning devices for sock machines United States
Scandicci, Italy
Orizio Paolo, S.p.A., Fabric knitting machines United States
Brescia, Italy
Sales of machines manufactured by Zamark (an affiliate of Lonati)
and Conti Complett generated an aggregate of 5.3%, 4.4% and 0.6% of the
Company's net revenues in fiscal 1995, 1994 and 1993, respectively.
Sales of machines manufactured by Jumberca generated 9.8%, 9.8%
and 3.2% of the Company's net revenues in fiscal 1995, 1994 and 1993,
respectively. The Company entered into its present agreement
with Jumberca (the "Jumberca Agreement") for the distribution of
Jumberca sweater and fabric knitting machines in February 1994.
All of the Jumberca machines sold by the Company to date have been
sweater and fabric knitting machines. The Company did not meet the
minimum purchase requirements under the Jumberca Agreement with
regard to the sweater or fabric
2
knitting machines in fiscal 1995 due to weakened demand for such
machines. In addition, although the percentage of the Company's net
revenues generated by sales of Jumberca machines in fiscal 1995 did
not change as compared to fiscal 1994, such sales did not contribute to
the Company's net income in fiscal 1995 due principally to the
Company's lowering its sales prices to customers to generate
orders. See Item 7, "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Results of Operations."
The Company expects sales of Jumberca machines to decrease in fiscal
1996 as compared to fiscal 1995, and does not expect its gross profit
from the sales of such machines to increase. In fiscal 1995,
purchasers of the Jumberca machines from the Company increased their
demands for extended payment terms due principally to the significant
capital commitment required in connection with such purchases and the
Company was unwilling to assume the credit risk resulting from
such extended terms. As a result of the foregoing, at the Company's
request, in March 1995 the parties amended the Jumberca Agreement
to eliminate the minimum purchase requirements thereunder and to
allow for the termination of the agreement prior to its original
termination date in January 1997. In accordance with the terms of
the Jumberca Agreement as amended, the Company terminated the agreement
with regard to the fabric knitting machines in July 1995 and the
agreement will terminate with regard to the sweater knitting machines in
December 1995. Although the Company believes that the the weakened
demand for the machines and the termination of the Jumberca Agreement
will have an adverse effect on its net revenues in fiscal 1996, it
does not believe that it will have any such effect on its net income
for the year. See Item 7, "Management's Discussion and Analysis
of Financial Condition and Results of Operations-- Effects of Inflation
and Changing Prices."
There can be no assurance that the Company will not
encounter significant difficulties in any attempt to enforce any
provision of the Lonati Agreement or Jumberca Agreement (or any other
agreement with a foreign manufacturer), or any agreement that may
arise in connection with the placement and confirmation of orders for
the machines manufactured by Lonati or Jumberca (or any other foreign
manufacturer) or obtain an adequate remedy for a breach of any such
provision, due principally to the fact that Lonati or Jumberca (or any
other foreign manufacturer) is a foreign company.
Used Machines, Parts and Liquidations
The Company sells used machinery and parts to the textile industry.
The Company carries significant amounts of machinery and parts
inventories to meet customers requirements and to assure itself of
an adequate supply of used machinery. The Company acts as a liquidator
of textile mills and as a broker in the purchase and sale of such mills.
Marketing and Sales
The Company markets and sells knitting machines and related
equipment primarily by maintaining frequent contacts with customers and
understanding of its customers' individual business needs.
Salespersons will set up competitive trials in a customer's plant and
allow the customer to use the Company's machine in its own work
environment alongside competing machines for two weeks to three
months. The Company also offers customers the opportunity to send their
employees to the Company for training courses on the operation and
service of the machines and, depending on the number of machines
purchased and the number of employees to train, may offer such
training courses at the customer's facility. In addition, the Company
exhibits its equipment at trade shows and uses its private showroom to
demonstrate new machines. These marketing strategies are complemented
by the Company's commitment to service and continuing education.
At August 15, 1995, the Company employed approximately 13 salespersons
and 26 technical representatives. In addition to its sales staff, the
Company uses over 30 commission sales agents in a number of foreign
countries in connection with its sales of used machines.
The terms of new machine sales generally are individually
negotiated including both the purchase price, payment terms and delivery
schedule. The Company is usually required to purchase imported
machines with a letter of credit in favor of the manufacturer delivered
not less than 15 days prior to the machine's shipment to the customer's
plant. Generally, the letter of credit must be payable 60 days or
longer from the date of the on-board bill of lading and upon
presentation of the bill of lading. The period from shipment by the
manufacturer to installation in the customer's plant is generally 30-45
days.
3
The Company encourages trade-ins of older equipment, which
reduces the customer's initial capital outlay. The Company believes
that its trade-in policy has increased sales of certain of the Company's
new equipment lines.
Substantially all of the machines sold by the Company are
drop-shipped from the foreign manufacturer by container or air freight
directly to the customer's plant using the Company's freight
forwarder to coordinate shipment. Title is taken at the European port,
and the Company insures the machines for 110% of cost.
Because a substantial portion of the Company's revenues are
derived from sales of machines and equipment imported from abroad,
these sales may be subject to import controls, duty and currency
fluctuations. The majority of the Company's purchases of Italian
machines for sale in the United States are denominated in Italian
lira. Generally, the Company has been able to adjust sales prices or
purchase lira hedging contracts to compensate for anticipated
dollar fluctuations. However, international currency fluctuations
that result in substantial price level changes could impede import sales
and substantially impact profits. The Company is not able to
assess the quantitative effect such international price level changes
could have upon the Company's operations. All of the Company's export
sales originating from the United States are made in U.S. dollars. All
of the sales of the Company's United Kingdom subsidiary are denominated
in pounds sterling.
The Company also markets used machines through its employees and
outside commission salespersons. The Company markets its used machines
in the United States and in a number of foreign countries. The Company
uses trade advertising extensively and at least once every two months
distributes lists throughout the industry of used machines that the
Company has for sale.
The Company exports certain new and used machines and parts for
sale in Canada and a number of other foreign countries. See Note 1 of
Notes to Consolidated Financial Statements for certain financial
information concerning the Company's foreign sales in fiscal 1995, 1994
and 1993.
Customers
The Company's customers consist primarily of the major sock
manufacturers in the United States. In fiscal 1995, the Company's two
largest customers, Renfro Corporation and Kayser-Roth Corporation,
accounted for 7.3% and 5.2%, respectively, of the Company's net
revenues. In fiscal 1994, the Company's two largest customers,
Fruit of the Loom, Inc., and Renfro Corporation, accounted for 13.8%
and 13.4% of the Company's net revenues. Generally, the customers
contributing the most to the Company's net revenues vary from year
to year. The Company believes that the loss of any principal customer
could have a material adverse effect on the Company.
Backlog
The Company's backlog of unfilled orders for new and used
machines was $4.1 million at July 1, 1995 as compared to $15.1 million
at July 2, 1994, and $24.5 million at July 3, 1993. Management
believes that all the company's unfilled orders at July 1, 1995 will
be filled by the end of fiscal 1996. The period of time required to
fill orders varies depending on the machine ordered. The decline in
backlog is attributed to weakened demand for sock and sweater machines.
Competition
The sock knitting machine industry is competitive. Lonati
single cylinder machines compete primarily with machines manufactured
by an Italian and a Czech company and Lonati double cylinder machines
compete primarily with machines manufactured by an Italian company
acquired in 1993 by Lonati but not represented by the Company.
Lonati machines compete, to a lesser extent, with machines
manufactured by a number of other foreign companies of varying sizes
and a small domestic company, and with companies selling used
machines. The principal competitive factors in the distribution of
sock knitting machines are technology, price, service, allowance of
trade-ins and delivery.
4
The Company believes that its competitive advantages are the
technological advantages of the Lonati machines, the Company's
commitment to customer service and the Company's allowance of trade-ins
of used machines on new Lonati machines. The Company believes that it
is at a short term competitive disadvantage if a potential customer's
decision will be based primarily on price since, generally, the
purchase price of Lonati machines is higher than that of competing
machines.
In its sale of new equipment, in addition to Lonati machines,
the Company competes with a number of foreign and domestic manufacturers
and distributors of new and used machines. In its sale of such
other machines and equipment, certain of the company's competitors may
have substantially greater resources than the Company.
Domestic and foreign sales of used sock and sheer hosiery
knitting machines is fragmented and highly competitive. The Company
competes with a number of domestic and foreign companies that
sell used machines as well as domestic and foreign manufacturers that
have used machines as a result of trade-ins. In the United States, the
Company has one primary competitor in its sale of used sock knitting
machines. The principal competitive factors in the Company's domestic
and foreign sales of used machines are price and availability of
machines that are in demand. Although the Company is the exclusive
distributor of parts for a number of the machines it distributes, it
competes with firms that manufacture and distribute duplicates of such
parts. In addition, the Company competes with a number of distributors
and manufacturers in its other parts sales.
Regulatory Matters
The Company is subject to various federal, state and local
statutes and regulations relating to the protection of the environment
and safety in the work place. The failure by the Company to comply
with any of such statutes or regulations could result in significant
monetary penalties, the cessation of certain of its operations, or
both. Management believes that the Company's current operations are
in compliance with applicable environmental and work place safety
statutes and regulations in all material respects. The Company's
compliance with these statutes and regulations has not materially
affected its business; however, the Company cannot predict the future
effects of compliance with such statutes or regulations.
Employees
As of August 15, 1995, the Company had 78 full-time employees. The
Company's employees are not represented by a labor union, and the
Company has never suffered an interruption of business as a result
of a labor dispute. The Company considers its relations with its
employees to be good.
Item 2. Properties.
The Company's headquarters, in which its administrative offices,
machinery rebuilding facilities and a substantial portion of its
warehouse space are located, is in Charlotte, North Carolina in an
approximately 89,000 square foot building that is leased from a
partnership owned by Robert S. Speizman and his brother. The City of
Charlotte has designated this building an "historic landmark," and, as
a result, modifications to the building require prior approval of the
Charlotte-Mecklenburg Historic Landmark Commission. The term of the
lease extends to March 31, 1996 and the annual rent thereunder was
$168,400 from January 1, 1993 to March 31, 1995. Annual rent is
$311,500 from April 1995 through March 1996. The Company also leases
approximately 25,000 square feet of additional warehouse space for
approximately $68,800 per year under a lease agreement that expires
April 1996, approximately 20,000 square feet of additional warehouse
space under a lease that expires September 1996 for an annual rental of
$48,000, and approximately 10,000 square feet of additional warehouse
space on a month-to-month basis for $100 per month, all in Charlotte,
North Carolina. The Company leases approximately 5,000 square feet of
office and warehouse space in Hicksville, New York, for approximately
$30,000 per year, under a lease expiring June 1997. The Company leases
approximately 250 square feet of office space, in which the
headquarters of its Canadian subsidiary are located, in Montreal,
Canada, for approximately $315 per month. The Company leases
approximately 2,500 square feet of office and warehouse space in
Leicester, United Kingdom, for approximately $1,700 per month.
5
The Company is considering plans to move its headquarters to a
different building in Charlotte, North Carolina in which its
administrative offices, machinery rebuilding facilities and all or
substantially all of its warehouse space can be located. The Company
anticipates that it will lease any such building.
Item 3. Legal Proceedings.
On August 21, 1989, Dorothy L. Boyd, Administratrix, instituted an
action against the Company in the United States District Court for the
Western District of Virginia, seeking $5,000,000.00 in damages
allegedly resulting from a wrongful death that involved machinery
manufactured and sold by the Company more than 20 years before the
death. On January 12, 1994, the District Court granted the Company's
Motion for Summary Judgment and entered a judgment for the Company.
The plaintiff appealed to the United States Court of Appeals for the
Fourth Circuit, which on December 12, 1994, affirmed the judgment of the
District Court. The time in which the plaintiff could either
petition the Fourth Circuit Court for a re-hearing or petition the
United States Supreme Court for a writ of certiorari, has expired.
Therefore, this case is completed with no finding of liability on the
part of the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the Company's security holders
during the fourth quarter of fiscal 1995.
Executive Officers of Registrant
The following table sets forth certain information regarding the
executive officers of the Company:
Name Age Positions with the Company
Robert S. Speizman 55 Chairman of the Board, President and Director
Josef Sklut 66 Vice President-Finance, Secretary, Treasurer
and Director
Robert S. Speizman has served as President of the Company
since November 1976. From 1969 to October 1976, Mr. Speizman served as
Executive Vice President of the Company. Mr. Speizman has been a
director of the Company'since 1967 and Chairman of the Board of
Directors since July 1987.
Josef Sklut has served as Vice President-Finance of the
Company'since 1978, as Secretary of the Company since 1977, as Treasurer
of the Company'since 1969 and as a director of the Company since 1977.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
The Company's Common Stock was listed on October 6, 1993, on
the NASDAQ National Market System under the symbol "SPZN". Previously,
the Common Stock was listed on the NASDAQ Small-Cap Market System.
The following table sets forth for the periods indicated (i) before
October 6, 1993, the high and low bid prices per share of Common Stock
as reported by the NASDAQ Small-Cap Market System and (ii) after October
5, 1993, the high and low sales prices as reported by the NASDAQ
National Market System.
Fiscal 1994 High Low
First Quarter (ended October 2, 1993) $19.50 $10.00
Second Quarter (ended January 1, 1994) 14.25 12.00
Third Quarter (ended April 2, 1994) 17.50 11.25
Fourth Quarter (ended July 2, 1994) 13.50 7.25
6
Fiscal 1995
First Quarter (ended October 1, 1994) 8.75 6.00
Second Quarter (ended December 31, 1994) 6.50 3.22
Third Quarter (ended April 1, 1995) 5.38 3.38
Fourth Quarter (ended July 1, 1995) 6.75 4.25
As of June 30, 1995, there were approximately 453 stockholders of
record of the Common Stock.
The Company has never declared or paid any dividends on its Common
Stock. On November 29, 1993, the Company purchased all of the 8,147
outstanding shares of its 5% noncumulative nonvoting preferred
stock, par value $100 per share (the "5% Preferred Stock"), for
$100.00 per share. Under the terms of the 5% Preferred Stock, the
Company was obligated to pay a cash dividend of $5.00 per share in
connection with this purchase. Consequently, on November 29, 1993, a
dividend of $40,735 was paid to the former holders of the 5% Preferred
Stock.
Future cash dividends, if any, will be at the discretion of the
Company's Board of Directors and will depend upon, among other things,
future earnings, operations, capital requirements, surplus,
restrictive covenants in agreements to which the Company may be
subject, general business conditions and such other factors as the
Board of Directors may deem relevant. The Company's present credit
facility contains certain financial and other covenants that could limit
the Company's ability to pay cash dividends on its capital stock.
Item 6. Selected Consolidated Financial Data.
Fiscal Year Ended
July 1, July 2, July 3, June 27, June 29,
1995 1994 1993 1992 1991
(In thousands, except net income per share data)
Statement of Income Data:
Net revenues $61,597 $69,526 $39,552 $26,564 $20,107
Cost of sales 53,986 60,004 32,635 22,997 16,829
Gross profit 7,611 9,522 6,917 3,567 3,278
Selling, general and administrative expenses 5,478 4,350 3,651 2,546 2,202
Operating income 2,133 5,172 3,266 1,021 1,076
Interest (income) expense, net (15) 6 186 196 300
Income before taxes on income 2,148 5,166 3,080 825 776
Taxes on income (1) 854 1,869 661 82 64
Net income 1,294 3,297 2,419 743 712
Preferred stock dividends - 41 - - -
Net income applicable to common stock $ 1,294 $ 3,256 $ 2,419 $ 743 $ 712
Per Share Data:
Net income per share $ .40 $ 1.12 $ 1.03 $ .32 $ .33
Weighted average number of shares 3,271 2,905 2,360 2,297 2,185
Balance Sheet Data:
Working capital $17,613 $16,579 $ 4,553 $ 2,792 $ 2,772
Total assets 35,704 30,160 18,145 13,519 7,223
Short-term debt - - 175 401 248
Long-term debt, including current portion 147 293 1,060 1,374 1,845
Redeemable preferred stock - - - - 234
Stockholder's equity 18,782 17,483 5,137 2,714 1,836
(1) Reflects the utilization of prior net operating losses to completely
offset federal income taxes in years 1991 and 1992 and to partially
offset federal income taxes in 1993.
7
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
General
The Company's revenues are generated primarily from its
distribution of textile equipment, principally knitting machines and
dyeing and finishing equipment, to manufacturers of textile products
and, to a lesser extent, from the sale of parts used in such equipment
and the sale of used textile equipment.
Results of Operations
Year Ended July 1, 1995 Compared to Year Ended July 2, 1994
Net Revenues. Net Revenues in fiscal 1995 were $61.6 million as
compared to $69.5 million in fiscal 1994, a decrease of $7.9 million,
or 11.4%. This decrease reflects a $14.3 million decline in sales
of hosiery equipment, partially offset by increases of $3.4 million
in the sales of sweater machines and related equipment, $1.8 million
in the sales of dyeing and finishing equipment, and $1.2 million in
the sales of spare parts. The Company's backlog of unfilled orders for
new and used machines at July 1, 1995, was $4.1 million as compared
to $15.1 million at July 2, 1994. The decline in backlog is attributed
to weakened demand for sock and sweater machines.
Cost of Sales. In fiscal 1995, cost of sales was $54.0 million
as compared to $60.0 million for fiscal 1994, a decrease of $6.0
million, or 10.0%. Cost of sales as a percent of net revenues increased
to 87.6% in fiscal 1995 as compared to 86.3% in fiscal 1994.
Approximately 85% of this increase is attributable to increased
field service expenses associated with new machines. The remainder is
related to leveling of demand.
Selling Expenses. Selling expenses increased to $3.6 million in
fiscal 1995 from $2.4 million in fiscal 1994, an increase of 48.8%.
This increase resulted from the start-up of a foreign knitting
machine division, as well as increased selling activities, overall.
Major components of the increase were salespersons salaries and
commissions, advertising and exhibitions, travel, warehouse and office
space cost, letter of credit expense and insurance expense.
General and Administrative Expenses. General and
administrative expenses, at $1,895,000 in fiscal 1995, were down
slightly from $1,942,000 in fiscal 1994. The decrease reflects
declines in salaries and bonuses, partially offset by increases in
payroll and other taxes and in provisions for losses on accounts
receivable. As a percent of net revenues, general and administrative
expenses were 3.1% in 1995 as compared to 2.8% in fiscal 1994,
reflecting the 11.4% decrease in net revenues between the two fiscal
years.
Interest Expense. Interest expense is expressed net of
interest income. In fiscal 1995, interest income exceeded interest
expense by $15,000. Net interest expense was $6,000 in fiscal 1994.
Taxes on Income. The provision for taxes on income in fiscal
1995 was 39.8% of income before taxes. The provision for taxes on income
in fiscal 1994 was 36.2%.
Net Income. Net income applicable to common stock decreased
to $1.3 million in fiscal 1995 from $3.3 million in fiscal 1994. Net
income per share decreased to $0.40 as compared to $1.12 per
share in fiscal 1994 on a 12.6% increase in the equivalent number of
common shares outstanding.
Year Ended July 2, 1994 Compared to Year Ended July 3, 1993
Net Revenues. Net revenues in fiscal 1994 were $69.5 million as
compared to $39.6 million in fiscal 1993, an increase of $29.9 million,
or 75.8%. This increase reflects increases of $21.5 million in
sales of hosiery equipment, $7.1 million in sweater machines and
related equipment and $1.3 million from all other activities. The
Company's
8
backlog of unfilled orders for new and used machines at July 2, 1994,
was $15.1 million as compared to $24.5 million at July 3, 1993.
Cost of Sales. In fiscal 1994, cost of sales was $60.0 million
as compared to $32.6 million for fiscal 1993, an increase of $27.4
million, or 83.9%. Cost of sales as a percentage of net revenues
increased to 86.3% from 82.5% in fiscal 1993. This increase in cost
of sales in fiscal 1994 reflected a narrowing of margins due to the
somewhat lower sales prices in response to a leveling of demand, as well
as increased competition for certain hosiery machines.
Selling Expenses. Selling expenses increased to $2.4 million in
fiscal 1994 from $2.0 million in fiscal 1993, an increase of 22.6%,
reflecting the Company's increased selling activities. The principal
components of this increase were salesperson's salaries and
commissions, advertising and exhibitions, travel, and warehouse and
office space cost. As a percentage of net revenues, selling expenses
declined to 3.5% in fiscal 1994 as compared to 5.0% in fiscal 1993.
General and Administrative Expenses. General and administrative
expenses were $1.9 million in fiscal 1994 as compared to $1.7 million
in fiscal 1993. Principal components of the $256,000 increases were
increases in salaries and bonuses, partially offset by declines in
life insurance expenses and in provisions for losses on accounts
receivable. As a percentage of net revenues, general and administrative
expenses decreased to 2.8% in fiscal 1994 as compared to 4.3% in fiscal
1993.
Interest Expense. Interest expense is expressed net of
interest income. Interest expense declined from $186,000 in fiscal
1993 to $6,000 in fiscal 1994. This decline reflects the elimination of
all debt to stockholders in fiscal 1994, reduced interest paid to
lending institutions, as well as an increase of $103,000 in interest
income in fiscal 1994.
Taxes on Income. The provision for taxes on income in fiscal
1994 was 36.2% of income before taxes as compared to 21.5% of such
income in fiscal 1993. The income tax provision in fiscal 1993 was
favorably affected by utilization of the Company's federal operating
loss carryforwards. Such carryforwards were fully utilized during
fiscal 1993.
Net Income. Net income applicable to common stock increased in
fiscal 1994 by $837,000 to $3.3 million from $2.4 million in fiscal
1993. That represents an increase of 34.6% in fiscal 1994 over fiscal
1993. Net income per share increased in fiscal 1994 to $1.12 as
compared to $1.03 per share in fiscal 1993, on a 23.1% increase in
the equivalent number of common shares outstanding.
Jumberca Agreement
Prior to its amendment in March 1995, the Jumberca
Agreement contained certain minimum purchase requirements for the
Jumberca sweater and fabric knitting machines. The Company did not
meet the minimum purchase requirements under the Jumberca Agreement
with regard to either type of machine in fiscal 1995 due principally
to weakened demand for such machines. Due, in part, to the weakened
demand, at the Company's request, in March 1995, the parties amended the
Jumberca Agreement to eliminate the minimum purchase requirements
thereunder and to allow for the termination of the agreement prior to
its original termination date in January 1997. In accordance with the
terms of the Jumberca Agreements, as amended in March 1995, the Company
terminated the agreement with regard to the Jumberca fabric knitting
machines in July 1995 and the agreement will terminate with regard to
the Jumberca sweater knitting machines in December 1995.
Although the Company believes that the weakened demand for the machines
and the termination of the Jumberca Agreement will have an adverse
effect on its net revenues in fiscal 1996, it does not believe that it
will have any such effect on its net income for the year. See Item 1,
"Business--General."
Liquidity and Capital Resources
The Company filed a registration statement on Form S-1
(Registration No. 33-69748), and amendments thereto, with the Securities
and Exchange Commission for the offering of 1,430,766 shares of the
Company's Common Stock
9
of which 700,000 were offered by the Company and 730,766 were offered
by certain stockholders. This registration statement was declared
effective by the Securities and Exchange Commission on November 12,
1993. Subsequently, the 15% over-allotment provision was elected by the
underwriters. As a result, the offering was increased by 214,614
shares, of which 164,164 were offered by the Company and 50,000 shares
were offered by a stockholder. The Company used net proceeds of this
offering (approximately $9.3 million) to collateralize letters of
credit, repurchase preferred stock, repay indebtedness owed to the
Company's President and principal stockholder, finance inventories of
new and used machines and for general corporate purposes.
The Company's operations require a substantial line of
letters of credit to cover its customers' orders. The Company's credit
facility provides for an overall facility of $14.0 million for
letters of credit, including up to $2.0 million in revolving funds.
This facility expires October 31, 1996. Management believes that
this facility will be adequate to meet current financial requirements.
Working capital increased by $1.0 million to $17.6 million at
July 1, 1995 as compared to $16.6 million at July 2, 1994. Operating
activities required $2.4 million in fiscal 1995 as compared to $2.9
million required by such activities in fiscal 1994. This decrease
in funds required resulted essentially from a $6.3 million increase
in inventories and a $1.2 million increase in prepaid expenses, which
were largely funded by a $5.0 million increase in accounts payable. As
a result, cash and cash equivalents declined from $5.4 million at July
2, 1994, to $2.4 million at July 1, 1995.
Seasonality and Other Factors
There are certain seasonal factors that may affect the
Company's business. Traditionally, manufacturing businesses in Italy
close for the month of August, and the Company's customers close
for one week in July. Consequently, no shipments or deliveries, as
the case may be, of machines distributed by the Company that are
manufactured in Italy are made during these periods in the Company's
first quarter. In addition, manufacturing businesses in Italy
generally close for two weeks in December, during the Company's second
quarter. Fluctuations on customer orders or other factors may affect
quarterly variations in net revenues from year to year.
Effects of Inflation and Changing Prices
Management believes that inflation has not had a material effect
on the Company's operations.
A substantial portion of the Company's machine and spare
part purchases are denominated and payable in Italian lira. Currency
fluctuations of the lira could result in substantial price level
changes and therefore impede or promote import/export sales and
substantially impact profits. However, to reduce exposure to adverse
foreign currency fluctuations during the period from customer orders
to payment for goods sold, the Company enters into forward exchange
contracts. The Company is not able to assess the quantitative effect
that such currency fluctuations could have upon the Company's
operations. There can be no assurance that fluctuations in foreign
currency exchange rates will not have a significant adverse effect on
future operations.
In addition, the Jumberca Agreement denominates the purchase
prices for the Jumberca machines specified therein in Spanish pesetas.
Since February 1994 to date, the Company, in orders that it has
placed with Jumberca, has denominated the purchase price for the
machines ordered in U.S. dollars and Jumberca has accepted all such
orders. The Company intends to continue this practice (which
eliminates the risk of adverse fluctuations in the value of the
peseta as compared to the dollar during the period between the date a
machine is ordered and the payment date) through December 1995, the
termination date of the Jumberca Agreement, with regard to any Jumberca
machines that it purchases during this period.
Under the Jumberca Agreement, in the event that the value
of the peseta as compared to the U.S. dollar is below a specified level
at the time a machine is ordered, there is an automatic upward
adjustment of the specified purchase price. (Since February 1994, the
date of the Jumberca Agreement, to date, the value of the peseta as
compared to the
10
dollar has not been below the level specified therein at any
time that the Company ordered a machine.) There is no similar
adjustment provision in the Jumberca Agreement in the event that the
value of the peseta as compared to the dollar increases. Also since
February 1994 to date, in a number of instances, the Company
has not paid Jumberca the purchase prices for the machines specified in
the Jumberca Agreement, but rather has negotiated the purchase price for
a particular machine at the time it places the order based on, among
other things, the then current value of the peseta and the dollar, the
number of machines ordered and competitive and other market conditions.
Item 8. Financial Statements and Supplementary Data.
The financial statements and supplementary data required by
this Item 8 appear on Pages F-1 through F-12 and S-1 through S-2 of 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.
The response to this Item 10 is set forth in part under the caption
"Executive Officers of the Registrant" in Part I of this Annual Report
on Form 10-K and the remainder is set forth in the Company's
Proxy Statement for the Annual Meeting of Shareholders to be held
November 16, 1995 (the "October 1995 Proxy Statement") under the
sections captioned "Election of Directors," "Certain Information
Regarding the Board of Directors" and "Compliance with Section 16(a) of
the Securities Exchange Act of 1934," which sections are incorporated
herein by reference.
Item 11. Executive Compensation.
The response to this Item 11 is set forth in the October
1995 Proxy Statement under the section captioned "Executive Compensation
and Related Information," which section, other than the subsections
captioned "Report of the Compensation Committee and the Stock Option
Committee on Executive Compensation" and "Comparative Performance
Graph," is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The response to this Item 12 is set forth in the October 1995 Proxy
Statement under the section captioned Stock Ownership of Certain
Beneficial Owners and Management, which section is incorporated by
reference.
Item 13. Certain Relationships and Related Transactions.
The response to this Item 13 is set forth in the October
1995 Proxy Statement under the section captioned "Certain Transactions,"
which section is incorporated herein by reference.
11
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a)
The following documents are included as part of the Annual Report on
Form 10-K:
1. Financial Statements:
Page
Report of Independent Certified Public Accountants F-1
Consolidated Balance Sheets - July 1, 1995 and July 2, 1994 F-2
Consolidated Financial Statements for each of the three years in the periods ended July 1,
1995, July 2, 1994 and July 3, 1993:
Consolidated Statements of Income F-3
Consolidated Statements of Stockholders Equity F-4
Consolidated Statements of Cash Flows F-5
Summary of Accounting Policies F-6
Notes to Consolidated Financial Statements F-7
2. Financial Statement Schedules:
Report of Independent Certified Public Accountants S-1
Schedule II - Valuation and Qualifying Accounts S-2
3. Exhibits:
The Exhibits filed as part of this Annual Report on Form 10-K
are listed on the Exhibit Index immediately preceding such Exhibits, and
are incorporated herein by reference.
(b)
Reports on Form 8-K
The Company filed no Forms 8-K in any of the months included in
the fourth quarter of the Company's current fiscal year.
12
SIGNATURES
Pursuant to the requirements of Section 131 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.
SPEIZMAN INDUSTRIES, INC.
Date: September __, 1995
By:
Robert S. Speizman, President
Pursuant to the requirements of the Securities Act of 1933,
this has been signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signatures Title Date
President and Director September 29, 1995
Robert S. Speizman (Principal Executive Officer)
Vice President-Finance, September 29, 1995
Josef Sklut Secretary, Treasurer and Director
(Principal Financial Officer
and Principal Accounting Officer)
Director September 29, 1995
Steven P. Berkowitz
Director September 29, 1995
William Gorelick
Director September 29, 1995
Scott Lea
13
(BDO Seidman, LLP Letter Head Appears Here)
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
Speizman Industries, Inc.
We have audited the accompanying consolidated balance sheets of Speizman
Industries, Inc. and subsidiaries as of July 1, 1995 and July 2, 1994, and the
related consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended July 1, 1995. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position
of Speizman Industries, Inc. and subsidiaries at July 1, 1995 and July 2, 1994,
and the results of their operations and their cash flows for each of the
three years in the period ended July 1, 1995, in conformity with generally
accepted accounting principles.
(Signature of BDO Seidman, LLP)
Charlotte, North Carolina BDO Seidman, LLP
September 1, 1995
F-1
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 1, July 2,
1995 1994
ASSETS
Current:
Cash and cash equivalents $ 2,436,859 $ 5,433,664
Accounts receivable (Notes 2 and 6) 16,078,683 15,170,190
Inventories (Notes 3 and 6) 13,428,014 7,296,836
Prepaid expenses and other current assets 2,458,355 1,182,894
TOTAL CURRENT ASSETS 34,401,911 29,083,584
Property and Equipment : (Notes 4 and 7)
Leasehold improvements 543,874 542,361
Machinery and equipment 876,565 509,197
Furniture, fixtures and transportation equipment 834,187 877,498
2,254,626 1,929,056
Less accumulated depreciation and amortization (1,440,688) (1,409,050)
NET PROPERTY AND EQUIPMENT 813,938 520,006
Other 488,609 556,271
$35,704,458 $30,159,861
LIABILITIES AND STOCKHOLDERS EQUITY
Current:
Accounts payable $15,056,927 $10,041,865
Customers deposits 884,881 1,827,196
Accrued expenses 833,886 515,118
Current maturities of long-term debt (Note 7) 13,190 120,630
TOTAL CURRENT LIABILITIES 16,788,884 12,504,809
Long-Term Debt (Note 7) 133,629 172,153
TOTAL LIABILITIES 16,922,513 12,676,962
Commitments (Notes 4, 9, 11, 12 and 13)
Stockholders Equity (Notes 8, 9 and 10):
Common Stock - par value $.10; authorized 6,000,000 shares;
issued 3,236,199 and 3,234,949 shares 323,620 323,495
Additional paid-in capital 12,459,965 12,455,590
Retained earnings 6,097,426 4,803,611
Foreign currency translation adjustment
731 -
Total 18,881,742 17,582,696
Treasury stock, at cost, 27,600 common shares (99,797) (99,797)
TOTAL STOCKHOLDERS EQUITY 18,781,945 17,482,899
$35,704,458 $30,159,861
See accompanying summary of accounting policies and notes to consolidated
financial statements.
F-2
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Year Ended
July 1, July 2, July 3,
1995 1994 1993
NET REVENUES (Note 1) $61,596 ,833 $69,525,581 $39,552,021
COSTS AND EXPENSES:
Cost of sales 53,986,242 60,003,901 32,634,909
Selling expenses 3,582,719 2,407,086 1,964,246
General and administrative expenses 1,894,915 1,942,375 1,686,722
Total costs and expenses 59,463,876 64,353,362 36,285,877
2,132,957 5,172,219 3,266,144
INTEREST (INCOME) EXPENSE, net of interest income
of $101,562, $128,675 and $26,031 (14,858) 6,393 186,388
Income before taxes on income 2,147,815 5,165,826 3,079,756
TAXES ON INCOME (Note 5) 854,000 1,869,000 661,000
NET INCOME 1,293,815 3,296,826 2,418,756
Preferred stock dividends - 40,735 -
NET INCOME APPLICABLE TO COMMON STOCK $ 1,293,815 $ 3,256,091 $ 2,418,756
NET INCOME PER SHARE $ 0.40 $ 1.12 $ 1.03
Weighted average number of common and equivalent
shares 3,271,464 2,904,525 2,359,754
See accompanying summary of accounting policies and notes to consolidated
financial statements.
F-3
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Foreign
Additional Retained Currency
Preferred Common Common Paid-In Earnings Translation Treasury Stockholder's
Stock Shares Stock Capital (Deficit) Adjustment Stock Equity
BALANCE, JUNE 28, 1992 $894,152 1,994,699 $199,470 $ 2,591,171 $(871,236) $ - $(99,797) $2,713,760
Net income - - - - 2,418,756 - - 2,418,756
Exercise of stock options - 4,142 414 4,317 - - - 4,731
BALANCE, JULY 3, 1993 894,152 1,998,841 199,884 2,595,488 1,547,520 - (99,797) 5,137,247
Net income before preferred
stock dividend - - - - 3,296,826 - - 3,296,826
Preferred stock dividend - - - - (40,735) - - (40,735)
Redemption of preferred stock (894,152) - - - - - - (894,152)
Conversion of preferred stock
to common stock - 240,770 24,077 55,376 - - - 79,453
Net proceeds of common
stock offering - 864,609 86,461 9,163,885 - - - 9,250,346
Exercise of stock options - 130,729 13,073 174,841 - - - 187,914
Tax effect of exercise of
stock options - - - 466,000 - - - 466,000
BALANCE, JULY 2, 1994 - 3,234,949 323,495 12,455,590 4,803,611 - (99,797) 17,482,899
Net income - - - - 1,293,815 - - 1,293,815
Exercise of stock options - 1,250 125 4,375 - - - 4,500
Foreign currency translation
adjustment - - - - - 731 - 731
BALANCE, JULY 1, 1995 $ - 3,236,199 $323,620 $12,459,965 $6,097,426 $ 731 $(99,797) $18,781,945
See accompanying summary of accounting policies and notes to consolidated
financial statements.
F-4
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended
July 1, July 2, July 3,
1995 1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,293,815 $ 3,296,826 $ 2,418,756
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 166,965 193,133 219,293
Provision for losses on accounts receivable 171,477 17,850 83,840
Provision for inventory obsolescence 200,000 200,000 200,000
Provision for deferred income taxes (75,000) 109,000 (390,000)
Provision for deferred compensation (6) 28,788 70,000
Foreign currency translation adjustment 731 - -
(Increase) decrease in:
Accounts receivable (1,079,970) (4,322,948) (5,991,612)
Inventories (6,331,178) (2,741,376) 1,363,427
Prepaid Expenses (1,176,461) (554,615) 228,795
Other assets 43,662 (168,226) (56,682)
Increase (decrease) in:
Accounts payable 5,015,062 2,237,330 1,249,242
Accrued expenses and customers deposits (623,547) (1,159,937) 1,493,546
Net cash provided by (used in) operating activities (2,394,450) (2,864,175) 888,605
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (520,274) (102,723) (119,647)
Proceeds from property and equipment disposals 59,377 3,501 16,537
Net cash used in investing activities (460,897) (99,222) (103,110)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on notes payable - (174,785) (226,359)
Principal payments on long term debt (145,958) (734,800) (579,641)
Net proceeds of common stock offering - 9,250,346 -
Dividends on preferred stock - (40,735) -
Redemption of preferred stock - (814,699) -
Issuance of common stock upon exercise of stock options
4,500 187,914 4,731
Net cash provided by (used in) financing activities (141,458) 7,673,241 (801,269)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (2,996,805) 4,709,844 (15,774)
CASH AND CASH EQUIVALENTS, at beginning of year 5,433,664 723,820 739,594
CASH AND CASH EQUIVALENTS, at end of year $2,436,859 $ 5,433,664 $ 723,820
See accompanying summary of accounting policies and notes to consolidated
financial statements.
F-5
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
SUMMARY OF ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements of
Speizman Industries, Inc. (the "Company") include
all of its subsidiaries, all of which are majority
owned. All material intercompany transactions (domestic
and foreign) have been eliminated. The financial
statements of the Company's United Kingdom subsidiary
are translated from pounds sterling to U.S. dollars in
accordance with generally accepted accounting
principles.
REVENUE RECOGNITION
The major portion of the Company's
revenues consists of sales and commissions on sales of
machinery and equipment. The profit derived
therefrom is recognized in full at the time of
shipment, except that commissions receivable over
more than one year are recognized at their
discounted present value. Total sales commissions
included in net revenues approximated $286,000,
$142,000 and $1,041,000 for the years ended July 1,
1995, July 2, 1994 and July 3, 1993, respectively.
CASH AND CASH EQUIVALENTS
For purposes of the statements of cash flows,
the Company considers all highly liquid debt
instruments with a maturity of three months or less to
be cash equivalents.
INVENTORIES
Inventories are carried at the lower of cost
or market. Cost is computed, in the case of machines,
on an identified cost basis and, in the case of other
inventories, on an average cost basis.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost.
Depreciation is computed over the estimated useful
lives of the assets by the straight-line method
for financial reporting purposes and by accelerated
methods for income tax purposes.
FOREIGN EXCHANGE CONTRACTS
The Company enters into foreign currency
contracts to reduce the foreign currency exchange
risks. Foreign currency hedging contracts obligate
the Company to buy a specified amount of foreign
currency at a fixed price in specific future periods.
Realized and unrealized gains and losses are recognized
in net income in the period of the underlying
transaction. As of July 1, 1995, the Company had
contracts maturing through December 1995 to purchase
approximately 27.3 billion Lira, approximately $16.7
million at the spot rate on that date.
TAXES ON INCOME
For the fiscal year ended 1993 the Company
followed the liability method of accounting for income
taxes in accordance with the Financial Accounting
Standards ("FAS") Board Statement No. 96. For fiscal
years ended 1995 and 1994, the Company adopted the
FAS Statement No. 109, "Accounting for Income Taxes",
which changes the liability approach to calculating
deferred income taxes set forth in Statement No. 96.
The impact of adopting the rules on the Company's
financial statements was not material.
INCOME PER SHARE
Income per share is computed on the
weighted average number of common and equivalent shares
outstanding during the period. Common equivalent
shares include those common shares which would be
issued upon the full conversion of the outstanding
convertible preferred stock and those common shares
issuable upon the exercise of the stock options, when
dilutive, net of shares assumed to have been
repurchased with the proceeds.
FISCAL YEAR
The Company maintains its accounting records
on a 52-53 week fiscal year. The fiscal year ends on
the Saturday closest to June 30. Years ending July 1,
1995 and July 2, 1994 included 52 weeks. The year
ended July 3, 1993 included 53 weeks.
RECLASSIFICATION
Certain 1993 amounts have been reclassified to
conform with 1995 presentation.
F-6
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- BUSINESS AND CREDIT RISK CONCENTRATION
The Company is engaged in the distribution
of machinery for the textile industry. With operations
in the United States, Canada and the United
Kingdom, the Company primarily sells to customers
located within the United States. Export sales from
the United States were approximately $8,547,000,
$5,439,000 and $4,039,000 during fiscal 1995, 1994
and 1993, respectively. There were no export sales by
the Canadian operations. Sales of the Company's United
Kingdom subsidiary amounted to approximately
$2,983,000, essentially all of which were to customers
in the United Kingdom.
Financial instruments which potentially subject
the Company to credit risk consist principally of
temporary cash investments and trade receivables. The
Company places its temporary cash investments with high
credit quality financial institutions and, by policy,
limits the amount of credit exposure to any one
financial institution.
The Company reviews a customer's credit history
before extending credit. An allowance for doubtful
accounts is established based upon factors
surrounding the credit risk of specific customers,
historical trends and other information. To reduce
credit risk the Company generally requires a down
payment on large equipment orders.
A substantial amount of the Company's
revenues are generated from the sale of sock knitting
and other machines manufactured by Lonati, S.r.l. and
one of its wholly owned subsidiaries. In 1995,
approximately 7% and 5% of revenues consisted of
sales to the Company's two largest customers. In
1994, approximately 14% and 13% of revenues consisted
of sales to the Company's two largest customers. In
1993, approximately 13% and 11% of revenues consisted
of sales to the Company's two largest customers.
Generally, the customers contributing the most to the
Company's net revenues vary from year to year.
NOTE 2 -- ACCOUNTS RECEIVABLE
Accounts receivable are summarized as follows:
July 1, 1995 July 2, 1994
Trade receivables $16,285,841 $15,239,891
Less allowance for doubtful accounts (207,158) (69,701)
Net accounts receivable $16,078,683 $15,170,190
NOTE 3 -- INVENTORIES
Inventories are summarized as follows:
July 1, 1995 July 2, 1994
Machines
New $ 4,786,811 $ 638,690
Used 5,319,489 3,579,346
Parts and supplies 3,321,714 3,078,800
Total $13,428,014 $7,296,836
NOTE 4 -- LEASES
The Company conducts its operations from
leased facilities which include both offices and
warehouses. Its primary operating facility is
leased from a partnership in which Mr. Robert S.
Speizman, the Company's president, has a 50%
interest. Lease payments to the partnership
approximated $204,000, $168,000, and $135,000 in
fiscal years 1995, 1994 and 1993, respectively.
The Company leases machinery and equipment,
furniture and fixtures and transportation equipment
under noncancelable capital lease agreements which
expire at various dates through 1998.
F-7
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Capitalized leases included in property and equipment are summarized as
follows:
July 1, 1995 July 2, 1994
Machinery and Equipment $ - $ 19,216
Furniture, fixtures and
transportation equipment 145,006 360,756
145,006 379,972
Less accumulated amortization (100,440) (190,329)
Net leased property $ 44,566 $ 189,643
As of July 1, 1995, future net minimum lease payments under capital
leases and future minimum rental payments required under operating
leases that have initial or remaining noncancelable terms in excess of
one year are as follows:
Capital Operating
Leases Leases
1996 $ 14,613 $436,942
1997 2,032 168,483
1998 2,181 65,474
1999 - 25,854
2000 - 17,139
Beyond - 19,745
Total minimum lease payments 18,826 $733,637
Less amount representing interest (2,789)
Present value of net minimum lease
payments $ 16,037
Total rent expense for operating leases approximated $515,800, $311,600,
and $176,300 for fiscal years 1995, 1994 and 1993, respectively.
NOTE 5 -- TAXES ON INCOME
Provisions for federal and state income taxes in the consolidated
statements of income are made up of the following components:
1995 1994 1993
Current:
Federal $747,000 $1,556,000 $ 818,000
State 182,000 204,000 233,000
929,000 1,760,000 1,051,000
Deferred:
Federal $ (54,000) $ 71,000 $ (310,000)
State (21,000) 38,000 (80,000)
(75,000) 109,000 (390,000)
Total taxes on income $ 854,000 $1,869,000 $ 661,000
Deferred tax benefits and liabilities are provided for the temporary
differences between the book and tax bases of assets and liabilities.
Deferred tax assets (liabilities) are reflected in the consolidated
balance sheets as follows:
July 1, 1995 July 2, 1994
Net current assets $395,000 $296,000
Net noncurrent assets (liability) (39,000) (15,000)
$356,000 $281,000
F-8
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Principal items making up the deferred income tax
(assets) liabilities are as follows:
Year Ended
July 1, July 2,
1995 1994
Inventory valuation reserves $(225,000) $(230,000)
Depreciation 98,000 148,000
Deferred charges (54,000) (72,700)
Capitalized leases (5,000) (61,000)
Inventory capitalization (91,000) (39,000)
Accounts receivable reserves (78,000) (26,000)
Other (1,000) (300)
Net deferred tax asset $(356,000) $(281,000)
The Company's effective income tax rates
were different than the U.S. Federal statutory tax rate
for the following reasons:
1995 1994 1993
U.S. Federal statutory tax rate . . . . . . . . . . . . . . . 34.0% 34.0% 34.0%
Net tax effect of prior year temporary difference for which no
deferred federal income tax benefits were recorded . . . - - (2.5)
State income taxes, net of Federal income tax benefit . . . . 3.5 3.7 3.7
Utilization of net operating loss carryforward . . . . . . . - - (8.7)
Utilization of tax credits . . . . . . . . . . . . . . . . . - - (5.5)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 (1.5) 0.5%
Effective tax rate . . . . . . . . . . . . . . . . . . . . . 39.8% 36.2% 21.5%
Operating loss carryforwards utilized in
1993 reduced the Company's income tax liability by
approximately $267,000. In 1993, all remaining
operating loss carryforwards were utilized; thus, the
income tax liability for 1994 was not offset by
carryforwards or credits.
NOTE 6 -- NOTES PAYABLE
The Company has a credit facility with
NationsBank, expiring October 31, 1996. This facility
provides $14.0 million including up to a maximum of
$2.0 million for direct borrowings, with the balance
available for the issuance of documentary letters
of credit. Amounts outstanding under the line of credit
bear interest at the greater of prime plus 1% or the
Federal Funds Effective Rate plus 1.5% for base rate
loans and the 30, 60 or 90 day LIBOR rate plus 2.0%
for LIBOR loans. In connection with this line of
credit, the Company granted a security interest in
accounts receivable and inventory, as defined in the
loan agreement. (See Note 13)
F-9
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
This credit facility contains certain
covenants that require, among other things, the Company
to maintain levels of current assets to current
liabilities, total liabilities to net worth, working
capital, tangible net worth of $14,147,000 and
certain fixed charge coverage. As of July 1, 1995, the
Company was in compliance with such covenants.
NOTE 7 -- LONG-TERM DEBT
Long-term debt consists of:
July 1, 1995 July 2, 1994
Total Current Total Current
Capital lease obligations (Note 4) $16,037 $13,190 $163,995 $120,630
Other 130,782 - 128,788 -
Total 146,819 13,190 292,783 $120,630
Current maturities (13,190) (120,630)
$133,629 $172,153
Annual maturities of long-term debt are
1996, $13,190; 1997, $1,078; 1998, $1,769; 1999, $0;
2000, $0; thereafter, $130,782.
NOTE 8 -- STOCK OPTIONS
The Company has reserved 125,000 and
250,000 shares of common stock under two employee
stock plans, adopted in 1981 and 1991, respectively.
As of July 1, 1995, options to purchase 11,522 shares
under the 1981 Plan and 138,907 shares under the 1991
Plan were outstanding. Each option granted under the
1991 Plan or the 1981 Plan becomes exercisable in
cumulative increments of 20%, 50%, 80% and 100% on
the first, second, third and fourth anniversaries of
the date of grant, respectively, and subject to certain
exceptions with regard to termination of employment
and the percentage of outstanding shares of Common
Stock owned, must be exercised within 10 years from the
date of the grant. The option price, subject to
certain exceptions, may not be less than 100% of the
fair market value per share of Common Stock on the
date of the grant of the option or 110% of such value
for persons who control 10% or more of the voting
power of the Company's stock on the date of grant. A
summary of option transactions and other information
for 1995, 1994 and 1993 follows:
Year Ended
July 1, July 2, July 3,
1995 1994 1993
Shares under option, beginning of year 124,957 255,686 205,046
Options granted 29,722 - 54,782
Options exercised (1,250 (130,729) (4,142)
Options expired (3,000) - -
Shares under option, end of year 150,429 124,957 255,686
Options exercisable 78,521 16,464 91,607
Prices of options exercised $.75 to $.75 to $.75 to
$1.875 $3.1625 $1.875
Prices of options outstanding, end of year $.75 to $.75 to $.75 to
$5.50 $5.50 $5.50
F-10
SPEIZMAN INDUSTRIES INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 9 -- STOCK REDEMPTION AGREEMENTS
The Company has an agreement with its
principal holder whereby, upon his death, the Company
is obligated to redeem a portion of the stock in the
Company held by the estate. The redemption price for
common stock is to be the fair market value of
common stock, less 5%, plus any accrued dividends. In
no case will the Company pay out more than the
amount of life insurance proceeds received by the
Company as a result of the death of the stockholder.
At July 1, 1995, there were 584,932 common
shares covered by the above agreement. The face value
of life insurance carried by the Company under this
agreement amounts to $1,150,000.
NOTE 10 -- PREFERRED STOCK
During the fiscal year ended July 2, 1994,
all of the Company's 5% Non-Voting Preferred Stock was
redeemed and all of the Company's 5% Non-Voting Senior
Convertible Preferred was converted into common stock.
The 5% Non-Voting Preferred Stock was
non-cumulative as to dividends and non-participating
and, in the event of dissolution, was redeemable
at $100 par value per share together with unpaid
dividends and accrued interest, in preference to common
stock distributions.
The 5% Non-Voting Senior Convertible
Preferred Stock (the "Senior Preferred Stock") was
non-cumulative as to dividends and non-participating
and was redeemable at the option of the Company at
$105 per share. In the event of dissolution, the
Senior Preferred Stock was redeemable at par and was
superior to the other series of preferred stock and
to all common stock. The Senior Preferred Stock was
convertible at the option of the holder into shares
of common stock at a conversion price of $3.00 par
value of the Senior Preferred Stock for each share of
common stock (240,766 common shares). As of July 3,
1993, the Senior Convertible Preferred Stock was stated
at its fair value at the time of issuance.
NOTE 11 -- DEFERRED COMPENSATION PLANS
The Company has deferred compensation
agreements with two employees providing for payments
amounting to $2,056,680 upon retirement and from
$1,546,740 to $2,181,600 upon death prior to
retirement. One agreement, as modified, has been in
effect since 1972 and the second agreement was
effective October 1989. Both agreements provide for
monthly payments on retirement or death benefits
over fifteen year periods. Both agreements are funded
under trust agreements whereby the Company pays to
the trust amounts necessary to pay premiums on life
insurance policies carried to meet the obligations
under the deferred compensation agreements.
Charges to operations applicable to those
agreements were approximately $43,881, $72,673 and
$113,885 for the fiscal years 1995, 1994 and 1993,
respectively.
NOTE 12 -- EMPLOYEES' RETIREMENT PLAN
The Company has a 401(k) retirement plan,
effective October 1, 1989, for all qualified employees
of the Company to participate in the plan.
Employees may contribute a percentage of their pretax
eligible compensation to the plan, and the Company
matches 25% of each employee's contribution up to 4% of
pretax eligible compensation. The Company's matching
contributions totaled approximately $17,000, $13,000
and $17,000 in fiscal years 1995, 1994 and 1993,
respectively.
F-11
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE 13 -- COMMITMENTS AND CONTINGENCIES
The Company had outstanding commitments
backed by letters of credit of approximately
$8,916,000 and $10,554,000 at July 1, 1995 and
July 2, 1994, respectively, relating to the purchase of
machine inventory for delivery to customers.
The Company has not obtained product
liability insurance to date due to the prohibitive
cost of such insurance. The nature and extent of
distributor liability for product defects is uncertain.
The Company has not engaged in manufacturing
activities since 1990, and management presently
believes that there is no material risk of loss to the
Company from product liability claims against the
Company as a distributor.
NOTE 14 -- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Year Ended
July 1, July 2, July 3,
1995 1994 1993
Cash paid during year for:
Interest $ 86,704 $ 135,068 $ 212,419
Income taxes 524,464 2,079,097 512,664
Supplemental data of non-cash investing and financing
activities:
The Company incurred capital lease
obligations in connection with lease agreements to
acquire equipment of $0, $4,304 and $238,238 during
fiscal 1995, 1994 and 1993, respectively.
F-12
(BDO Seidman LLP Letterhead)
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
SPEIZMAN INDUSTRIES, INC.
The audits referred to in our report dated September 1, 1995, relating to the
consolidated financial statements of Speizman Industries, Inc. and subsidairies
which is contained in Item 8 of this Form 10-K included the audit of the
financial statement schedule listed in the accompanying index. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement schedule
based upon our audits.
In our opinion, such consolidated financial statement schedule presents
fairly, in all material respects, the information set forth therein.
(Signature of BDO Seidman, LLP)
Charlotte, North Carolina BDO Seidman, LLP
September 1, 1995
S-1
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
Column A Column B Column C Column D Column E Column F
Balance at Charged to Charged to Deductions Balance
beginning costs and other from at end
Description of period expenses accounts reserves of period
Fiscal year ended July 3, 1993:
Reserve for doubtful accounts . . . $ 70,399 $ 83,840 $ - $ 26,678 $127,561
Reserve for inventory obsolescence 423,145 $200,000 $ - $ - $623,145
Fiscal year ended July 2, 1994:
Reserve for doubtful accounts . . . $127,561 $ 17,580 $ - $ 75,440 $69,701
Reserve for inventory obsolescence $623,145 $200,000 $ - $212,114 $611,031
Fiscal year ended July 1, 1995:
Reserve for doubtful accounts . . . $ 69,701 $171,477 $ - $ 34,020 207,158
Reserve for inventory obsolescence $611,031 $200,000 $ - $215,041 $595,990
S-2
SPEIZMAN INDUSTRIES, INC.
INDEX TO EXHIBITS
Exhibit Sequential
Number Description of Exhibit Page No.
3.1 Certificate of Incorporation of Speizman Industries,
Inc. (the "Company"). (Incorporated by reference to
Exhibit 3.1 contained in the Company s Registration
Statement on Form S-1 (the "1993 Form S-1"),
registration number 33-69748, filed with the Securities
and Exchange Commission on September 30, 1993, and
amendments thereto.)
3.2 Certificate of Amendment to Certificate of
Incorporation of the Company, dated December 4, 1978.
(Incorporated by reference to Exhibit 3.2 contained in
the 1993 Form S-1.)
3.3 Certificate of Amendment to Certificate of
Incorporation of the Company, dated February 8, 1993.
(Incorporated by reference to Exhibit 3.3 contained in
the 1993 Form S-1.)
3.4 Certificate of Stock Designation of the Company, dated
October 23, 1973. (Incorporated by reference to Exhibit
3.4 contained in the 1993 Form S-1.)
3.5 Certificate of Stock Designation of the Company, dated
June 27, 1978, as modified by Certificate of Increasing
Stock Designated, dated January 11, 1979. (Incorporated
by reference to Exhibit 3.5 contained in the 1993 Form
S-1.)
3.6 Bylaws of the Company, as amended November 7, 1978.
(Incorporated by reference to Exhibit 3.6 contained in
the 1993 Form S-1.)
4.1 Certificate of Incorporation of the Company as
currently in effect (included as Exhibits 3.1 through
3.5). (Incorporated by reference to Exhibit 4.1
contained in the 1993 Form S-1.)
4.2 Bylaws of the Company, as amended November 7, 1978.
(Incorporated by reference to Exhibit 4.2 contained in
the 1993 Form S-1.)
4.3 Specimen Common Stock Certificate. (Incorporated by
reference to Exhibit 4.3 contained in the 1993 Form S-1.)
10.1 Agency Agreement between the Company and Lonati,
S.r.l., Brescia, Italy ("Lonati"), dated January 2,
1992, relating to the Company's distribution of
machines in the United States. (Incorporated by
reference to Exhibit 10.1 contained in the 1993 Form S-1.)
10.2 Agency Agreement between the Company and Lonati, dated
January 2, 1992, relating to the Company's distribution
of machines in Canada. (Incorporated by reference to
Exhibit 10.2 contained in the 1993 Form S-1.)
10.3 Agency Agreement between the Company and Santoni,
S.r.l., Brescia, Italy ("Santoni"), dated January 2,
1992 ("Santoni Agreement"). (Incorporated by reference
to Exhibit 10.3 contained in the 1993 Form S-1.)
10.4 Letter from Santoni relating to the Santoni Agreement,
dated June 8, 1992. (Incorporated by reference to
Exhibit 10.4 contained in the 1993 Form S-1.)
10.5 Letter Agreement between the Company and Santoni
relating to the Santoni Agreement, dated July 21, 1993.
(Incorporated by reference to Exhibit 10.5 contained in
the 1993 Form S-1.)
10.6 Agreement between the Company and Jumberca, S.A.
Badalona, Spain ("Jumberca") dated October 20, 1992, in
original Spanish and an uncertified English
translation. (Incorporated by reference to Exhibit 10.6
contained in the 1993 Form S-1.)
10.7 Agreement between the Company and Jumberca, dated July
13, 1993. (Incorporated by reference to Exhibit 10.6.1
contained in the Company's Annual Report on Form 10-K
(the "1994 Form 10-K") for the fiscal year ended July
2, 1994, File No. 0-8544, filed on September 30, 1994.)
10.8 Agreement between the Company and Jumberca dated
February 1, 1994, in original Spanish and an
uncertified English translation. (Portions of Exhibit
10.8) were omitted pursuant to a request for
confidential treatment filed with the Securities and
Exchange Commission ("Commission"). The omitted
portions were filed separately with the Commission.)
(Incorporated by reference to Exhibit 10.6.2 contained
in the Company's Annual Report on Form 10-K/A Amendment
No. 1 for the fiscal year ended July 2, 1994, File No.
0-8544, filed on December 12, 1994.)
10.9 Collaboration Agreement between the Company and
Jumberca dated May 10, 1994. (Incorporated by
reference to Exhibit 10.6.3 contained in the Company's
1994 Form 10-K).
10.10 Agreement between the Company and Jumberca, dated March 41
16, 1995.
10.11 Fax to Jumberca dated July 28, 1995, canceling fabric 47
portion of agreement effective July 31, 1995.
10.12 Fax to Jumberca dated August 22, 1995, canceling 48
sweater portion of agreement effective December 31,
1995.
10.13 Agency Agreement between the Company and Zamark,
S.p.A., Somma Lombardo, Italy, dated August 3, 1992.
(Incorporated by reference to Exhibit 10.7 contained in
the Company's 1994 Form 10-K.)
10.14 Distributorship Agreement between the Company and Conti
Complett, S.p.A., Milan, Italy, dated October 2, 1989.
(Incorporated by reference to Exhibit 10.8 contained in
the Company's 1994 Form 10-K.)
10.15 Letter from Orizio Paolo, S.p.A., Brescia, Italy, dated 48
July 18, 1995, appointing Company as its exclusive
distributor.
10.16 Split Dollar Insurance Agreement, dated January 15,
1992, between the Company and Richard A. Bigger, Jr.,
Successor Trustee of the Robert S. Speizman Irrevocable
Insurance Trust. (Incorporated by reference to Exhibit
10.13 contained in the 1993 Form S-1.)
10.17 Lease Agreement between the Company and Speizman
Brothers Partnership, dated as of December 12, 1990.
(Incorporated by reference to Exhibit 10.14 contained
in the 1993 Form S-1.)
10.18 Lease Amendment and Extension Agreement between the 49
Company and Speizman Brothers Partnership dated April
1, 1995.
10.19 Deed of Lease between Speizman Canada, Inc., and Metro
II & III, undated, as renewed by letter agreement,
dated February 17, 1992. (Incorporated by reference to
Exhibit 10.19 contained in the 1993 Form S-1.)
10.20 Letter Agreement extending lease between Speizman 53
Canada, Inc., and Metro II & III, dated October 21,
1994.
10.21 Agreement of Lease between the Company and LBA
Properties, Inc., dated June 2, 1994. (Incorporated by
reference to Exhibit 10.17.1 contained in the Company s
1994 Form 10-K.)
10.22 Lease Agreement between the Company and B.F. Knott,
dated May 12, 1993. (Incorporated by reference to
Exhibit 10.18 contained in the Company's 1994 Form 10-
K.)
10.23 Modification and Extension of Lease between the Company
and B.F. Knott, dated March 29, 1994. (Incorporated by
reference to Exhibit 10.18.1 contained in the Company's
1994 Form 10-K.)
10.24 Modification and Extension of Lease between the Company 54
and B.F. Knott, dated October 17, 1994.
10.25 Modification and Extension of Lease between the Company 55
and B.F. Knott, dated February 13, 1995.
10.26 Lease Agreement between the Company and Daniel H. 57
Porter, dated August 17, 1995.
10.27* 1981 Incentive Stock Option Plan of the Company.
(Incorporated by reference to Exhibit 10.19 contained
in the 1993 Form S-1.)
10.28* 1991 Incentive Stock Option Plan and Amendment to 1981
Incentive Stock Option Plan of the Company.
(Incorporated by reference to Exhibit 10.20 contained
in the 1993 Form S-1.)
10.29* 1991 Incentive Stock Option Plan, as Amended and
Restated Effective September 20, 1993, of the Company.
(Incorporated by reference to Exhibit 10.21 contained
in the 1993 Form S-1.)
10.30* Restated Deferred Compensation Agreement, dated May 22,
1989, between the Company and Josef Sklut, as amended
by Amendment to Deferred Compensation Agreement, dated
December 30, 1992 (the "Deferred Compensation
Agreement"). (Incorporated by reference to Exhibit
10.27 contained in the 1993 Form S-1.)
10.31* Restated Trust Agreement, dated May 22, 1989, between
the Company and First Citizens Bank and Trust Company,
as amended by First Amendment to Trust Agreement dated
December 30, 1992, relating to the Deferred
Compensation Agreement. (Incorporated by reference to
Exhibit 10.28 contained in the 1993 Form S-1.)
10.32* Executive Bonus Plan of the Company, adopted February
2, 1990, as amended March 5, 1990. (Incorporated by
reference to Exhibit 10.29 contained in the 1993 Form
S-1.)
10.33* Executive Bonus Plan of the Company, adopted July 20,
1993. (Incorporated by reference to Exhibit 10.30
contained in the 1993 Form S-1.)
10.34* Resolutions of the Company's Board of Directors dated 58
November 15, 1995, extending Executive Bonus Plan
adopted July 20, 1993.
10.35 Redemption Agreement between the Company and Robert S.
Speizman, dated May 31, 1974, as amended by Modified
Redemption Agreement, dated April 14, 1987, Second
Modified Redemption Agreement, dated September 30,
1991, and Third Modified Redemption Agreement, dated as
of July 14, 1993. (Incorporated by reference to Exhibit
10.34 contained in the 1993 Form S-1.)
10.36 Fourth Modified Redemption Agreement between the 59
Company and Robert S. Speizman, dated September 14,
1994.
10.37 NationsBank of North Carolina, National Association
$12,000,000 Credit Facility for Speizman Industries,
Inc., dated April 19, 1994. (Incorporated by reference
to Exhibit 10.45 contained in the 1994 Form 10-K.)
10.38 1995 Consolidated Amendment Agreement to Loan Agreement 62
and Related Documents dated May, 1995.
11 Statement re: Computation of Net Income per Share 70
23 Consent of BDO Seidman 71
* Represents a management contract or compensatory plan or
arrangement of the Registrant.