1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 28, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________ to ____________.
Commission File Number 33-27038
JPS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 57-0868166
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
555 North Pleasantburg Drive, Suite 202, Greenville, South Carolina 29607
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(Address of principal executive offices) (Zip Code)
Registrant"s telephone number (864) 239-3900
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- ------
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes X No
----- ------
Indicate the number of shares outstanding of each of the issuer"s classes of
common stock, as of the latest practicable date: 9,284,643 shares of the
Company"s Common Stock were outstanding as of August 13, 2001.
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JPS INDUSTRIES, INC.
INDEX
Page
PART I. FINANCIAL INFORMATION Number
Item 1. Condensed Consolidated Balance Sheets
July 28, 2001 (Unaudited) and October 28, 2000................ 3
Condensed Consolidated Statements of Operations
Three Months and Nine Months Ended July 28, 2001 and
July 29, 2000 (Unaudited)..................................... 4
Condensed Consolidated Statements of Cash Flows
Nine Months Ended July 28, 2001 and
July 29, 2000 (Unaudited)..................................... 5
Notes to Condensed Consolidated Financial Statements (Unaudited).. 6
Item 2. Management"s Discussion and Analysis of Financial Condition
and Results of Operations..................................... 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk........ 11
PART II. OTHER INFORMATION ................................................... 12
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Item 1. Financial Statements
JPS INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
July 28, October 28,
2001 2000
--------- ---------
(Unaudited)
ASSETS
Current assets:
Cash $ 1,177 $ 2,216
Accounts receivable 22,321 27,640
Inventories (Note 2) 18,911 18,583
Prepaid expenses and other (Note 5) 3,938 6,993
Net assets of discontinued operations (Note 4) -- 27,539
--------- ---------
Total current assets 46,347 82,971
Property, plant and equipment, net 44,995 43,439
Reorganization value in excess of amounts allocable
to identifiable assets 2,841 2,971
Other assets 19,057 18,861
--------- ---------
Total assets $ 113,240 $ 148,242
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 9,705 $ 13,303
Accrued interest 92 759
Accrued salaries, benefits and withholdings 2,263 6,776
Other accrued expenses 3,662 4,924
Current portion of long-term debt (Note 3 and Note 4) 608 936
--------- ---------
Total current liabilities 16,330 26,698
Long-term debt (Note 3 and Note 4) 23,706 51,529
Other long-term liabilities 18,216 17,607
--------- ---------
Total liabilities 58,252 95,834
--------- ---------
SHAREHOLDERS' EQUITY:
Common stock- $.01 par value; authorized -
22,000,000 shares; issued - 10,000,000 shares; outstanding -
9,282,977 shares in 2001 and 9,732,500 shares in 2000 100 100
Additional paid-in capital 124,432 124,190
Treasury stock (at cost) - 717,023 in 2001 and
267,500 shares in 2000 (2,782) (1,263)
Accumulated deficit (66,762) (70,619)
--------- ---------
Total shareholders' equity 54,988 52,408
--------- ---------
Total liabilities and shareholders' equity $ 113,240 $ 148,242
========= =========
Note: The condensed consolidated balance sheet at October 28, 2001 has been
extracted from the audited financial statements.
See notes to condensed consolidated financial statements.
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JPS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands Except Per Share Data)
(Unaudited)
Three Months Ended Nine Months Ended
------------------------------ ------------------------------
July 28, July 29, July 28, July 29,
2001 2000 2001 2000
------------ ------------ ------------ ------------
Net sales $ 34,925 $ 43,825 $ 113,095 $ 120,001
Cost of sales 28,005 32,988 88,543 90,043
------------ ------------ ------------ ------------
Gross profit 6,920 10,837 24,552 29,958
Selling, general and administrative
expenses 4,830 7,090 16,288 20,146
Other income, net 1 6 1 12
------------ ------------ ------------ ------------
Operating profit 2,091 3,753 8,265 9,824
Interest expense 463 836 1,948 2,534
------------ ------------ ------------ ------------
Income before income taxes
and discontinued operations 1,628 2,917 6,317 7,290
Provision for income taxes 634 953 2,460 2,975
------------ ------------ ------------ ------------
Income from continuing operations 994 1,964 3,857 4,315
Loss from discontinued operations -- (548) -- (604)
------------ ------------ ------------ ------------
Net income $ 994 $ 1,416 $ 3,857 $ 3,711
============ ============ ============ ============
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING
Basic 9,261,763 9,983,750 9,357,644 9,991,875
============ ============ ============ ============
Diluted 9,537,752 10,107,398 9,616,722 10,055,153
============ ============ ============ ============
Basic earnings per common share:
Income from continuing operations $ 0.11 $ 0.19 $ 0.41 $ 0.43
Discontinued operations, net of taxes:
Loss from discontinued operations -- (0.05) -- (0.06)
------------ ------------ ------------ ------------
NET INCOME $ 0.11 $ 0.14 $ 0.41 $ 0.37
============ ============ ============ ============
Diluted earnings per common share:
Income from continuing operations $ 0.10 $ 0.19 $ 0.40 $ 0.43
Discontinued operations, net of taxes:
Loss from discontinued operations -- (0.05) -- (0.06)
------------ ------------ ------------ ------------
NET INCOME $ 0.10 $ 0.14 $ 0.40 $ 0.37
============ ============ ============ ============
See notes to condensed consolidated financial statements.
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JPS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Nine Months Ended
-------------------------
July 28, July 29,
2001 2000
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,857 $ 3,711
-------- --------
Adjustments to reconcile net income to net cash provided by
operating activities:
Loss from discontinued operations -- 604
Depreciation and amortization 4,613 4,615
Amortization of deferred financing costs 235 391
Deferred income tax provision (benefit) 2,460 4,048
Changes in assets and liabilities:
Accounts receivable 5,319 (666)
Inventories (328) 1,032
Prepaid expenses and other assets 595 (1,251)
Accounts payable (3,598) (426)
Accrued expenses and other liabilities (6,442) 1,914
Other, net 408 (4,178)
-------- --------
Total adjustments 3,262 6,083
-------- --------
Net cash provided by continuing operating activities 7,119 9,794
Net cash from discontinued operations -- 12,461
-------- --------
Net cash provided by operating activities 7,119 22,255
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Property and equipment additions (5,735) (1,673)
Proceeds from assets held for sale 27,539 --
-------- --------
Net cash provided by (used in) investing activities 21,804 (1,673)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Financing costs incurred (197) --
Purchase of treasury stock (2,104) (133)
Net proceeds from exercise of stock options 490 --
Revolving credit facility borrowings (repayments), net (27,287) (19,110)
Repayment of other long-term debt (864) (689)
-------- --------
Net cash used in financing activities (29,962) (19,932)
-------- --------
NET INCREASE (DECREASE) IN CASH (1,039) 650
CASH AT BEGINNING OF PERIOD 2,216 427
-------- --------
CASH AT END OF PERIOD $ 1,177 $ 1,077
======== ========
SUPPLEMENTAL INFORMATION ON CASH FLOWS
FROM CONTINUING OPERATIONS:
Cash interest paid $ 1,714 $ 4,765
Cash income taxes paid, net 477 269
See notes to consolidated financial statements.
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JPS INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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1. Basis of Presentation
Unless the context otherwise requires, the terms "JPS" and the
"Company" as used in these condensed consolidated financial statements
mean JPS Industries, Inc. and JPS Industries, Inc. together with its
subsidiaries, respectively.
The Company has prepared, without audit, the interim condensed
consolidated financial statements and related notes. In the opinion of
management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position,
results of operations and cash flows at July 28, 2001 and for all
periods presented have been made.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amount of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested
that these condensed consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in
the Company"s Annual Report on Form 10-K for the fiscal year ended
October 28, 2000 ("Fiscal 2000"). The results of operations for the
interim period are not necessarily indicative of the operating results
for the full year. Certain amounts have been reclassified to conform to
the current presentation, including amounts related to the sale of the
Company's Apparel Division on November 17, 2000.
2. Inventories (in thousands):
July 28, October 28,
2001 2000
------- -------
Raw materials and supplies $ 3,901 $ 5,796
Work-in-process 4,999 5,135
Finished goods 10,011 7,652
------- -------
Total $18,911 $18,583
======= =======
3. Long-Term Debt (in thousands):
July 28, October 28,
2001 2000
-------- --------
Senior credit facility, revolving line of credit $ 21,011 $ 48,000
Equipment financing -- 736
Capital lease obligation 3,303 3,729
-------- --------
Total 24,314 52,465
Less current portion (608) (936)
-------- --------
Long-term portion $ 23,706 $ 51,529
======== ========
On May 9, 2001, the Company replaced the existing syndicated senior
revolving credit facility with a new Revolving Credit and Security
Agreement with First Union National Bank. The new facility provides for
a revolving credit loan facility and letters of credit ("the Revolving
Credit Facility") in a
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maximum principal amount equal to the lesser of (a) $35 million or (b)
a specified borrowing base (the "Borrowing Base"), which is based upon
eligible receivables, eligible inventory, and a specified dollar amount
(currently $10,000,000 subject to reduction). The Revolving Credit
Facility restricts investments, acquisitions, and dividends. The Credit
Agreement contains financial covenants relating to minimum levels of
net worth, as defined, and a minimum debt to EBITDA ratio, as defined.
The Company is currently in compliance with all of the restrictions and
covenants of its new Revolving Credit Facility. All loans outstanding
under the Revolving Credit Facility bear interest at the 30-day LIBOR
rate plus an applicable margin (the "Applicable Margin") based upon the
Company's debt to EBITDA ratio. As of July 28, 2001, the Company's
effective interest rate was 5.0%, and it had approximately $14 million
available for borrowing under the Revolving Credit Facility.
4. Discontinued Operations
Apparel Fabric Business - On November 17, 2000, the Company sold the
assets of its greige apparel fabric business which included three
manufacturing facilities in South Boston, Virginia; Greenville, South
Carolina; and Laurens, South Carolina; and administrative offices in
Greenville, South Carolina, New York and Los Angeles, thereby exiting
its apparel business. The business accounted for sales of $90.1 million
and operating income of $2.4 million in the Nine Months Ended July 29,
2000. The consideration for the sale consisted of approximately $27.5
million in cash and future consideration in the form of an earn-out
based on earnings before interest, depreciation and amortization, as
defined, for the 24-month period following the transaction plus certain
assumed liabilities. The Company has accounted for the results of the
Apparel Fabric Business as a discontinued operation and a charge for
loss on disposal of discontinued operations of $47.4 million was
recorded in Fiscal 2000 related primarily to the writedown of disposed
plant assets and related Reorganization Value to realizable value and
other exit costs. The net proceeds from the sale of $26.2 million were
used to reduce the Company's outstanding indebtedness on its Revolving
Credit Facility which was amended in connection with the transaction to
reflect the Company's lower borrowing requirements.
5. Contingencies
At July 28, 2001, the Company had net operating loss carryforwards for
regular federal income tax purposes of approximately $85.0 million
(subject to adjustment by the Internal Revenue Service). The net
operating loss carryforwards expire in years 2003 through 2021. The
Company also has federal alternative minimum tax net operating loss
carryforwards of approximately $104.5 million (subject to adjustment)
which expire in 2004 through 2021. In addition, the Company has
alternative minimum tax credits of approximately $1.8 million that can
be carried forward indefinitely and used as a credit against regular
federal taxes, subject to limitation. The increase in net operating
loss carryforwards from year end results primarily from the sale of the
Apparel Division which was recorded in the first quarter for tax
purposes.
The Company"s ability to utilize its net operating loss carryforwards
is limited under the income tax laws as a result of a change in the
ownership of the Company's stock. The effect of such ownership change
is to limit the annual utilization of the net operating loss
carryforwards to an amount equal to the value of the Company
immediately after the time of the change (subject to certain
adjustments) multiplied by the Federal long-term tax exempt rate. Due
to the Company"s operating history, it is uncertain that it will be
able to utilize all deferred tax assets. Therefore, a valuation
allowance of approximately $29.2 million has been provided.
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The Company is exposed to a number of asserted and unasserted potential
claims encountered in the normal course of business including certain
asbestos-based claims. Except as discussed below, management believes
that none of this litigation, if determined unfavorable to the Company,
would have a material adverse effect on the financial condition or
results of operations of the Company.
In June 1997, Sears Roebuck and Co. ("Sears") filed a multi-count
complaint against JPS Elastomerics Corp. ("Elastomerics"), a
wholly-owned subsidiary of JPS, and two other defendants alleging an
unspecified amount of damages in connection with the alleged premature
deterioration of the Company"s roofing membrane installed on
approximately 150 Sears stores. No trial date has been established. The
Company believes it has meritorious defenses to the claims and intends
to defend the lawsuit vigorously. Management, however, cannot determine
the outcome of the lawsuit or estimate the range of loss, if any, that
may occur. Accordingly, no provision has been made for any loss which
may result. An unfavorable resolution of the actions could have a
material adverse effect on the business, results of operations or
financial condition of the Company.
6. Business Segments
The Company's reportable segments are JPS Elastomerics and JPS Glass.
The reportable segments were determined using the Company's method of
internal reporting, which divides and analyzes the business by the
nature of the products manufactured and sold, the customer base,
manufacturing process, and method of distribution. The Elastomerics
segment principally manufactures and markets extruded products
including high performance roofing products, environmental
geomembranes, and various polyurethane products. The Glass segment
produces and markets specialty substrates mechanically formed from
fiberglass and other specialty synthetics for a variety of applications
such as printed circuit boards, filtration, advanced composites,
building products, defense, and aerospace.
The Company evaluates the performance of its reportable segments and
allocates resources principally based on the segment"s operating
profit, defined as earnings before interest and taxes. Indirect
corporate expenses allocated to each business segment are based on
management's analysis of the costs attributable to each segment. The
following table presents certain information regarding the business
segments (in thousands):
Three Months Ended Nine Months Ended
-------------------------- --------------------------
July 28, July 29, July 28, July 29,
2001 2000 2001 2000
--------- --------- --------- ---------
Net sales:
Elastomerics $ 19,913 $ 22,403 $ 60,729 $ 61,456
Glass 15,012 22,866 52,366 62,732
--------- --------- --------- ---------
34,925 45,269 113,095 124,188
Less intersegment sales(1) -- (1,444) -- (4,187)
--------- --------- --------- ---------
Net sales $ 34,925 $ 43,825 $ 113,095 $ 120,001
========= ========= ========= =========
Operating profit(2):
Elastomerics $ 1,043 $ 1,825 $ 3,235 $ 5,281
Glass 1,048 1,928 5,030 4,543
--------- --------- --------- ---------
Operating profit 2,091 3,753 8,265 9,824
Interest expense 463 836 1,948 2,534
--------- --------- --------- ---------
Income before income taxes
and discontinued operations $ 1,628 $ 2,917 $ 6,317 $ 7,290
========= ========= ========= =========
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July 28, October 28,
2001 2000
--------- ---------
Identifiable assets:
Elastomerics $ 55,624 $ 74,801
Glass 57,616 74,569
Eliminations -- (1,128)
--------- ---------
Total assets $ 113,240 $ 148,242
========= =========
(1) Intersegment sales consist primarily of the transfer of certain scrim
products manufactured by the Glass segment to the Elastomerics segment and
were discontinued in Fiscal 2000. All intersegment revenues and profits are
eliminated in the accompanying condensed consolidated financial statements.
(2) The operating profit of each business segment includes a proportionate
share of indirect corporate expenses. The Company's corporate group is
responsible for finance, strategic planning, legal, tax, and regulatory
affairs for the business segments. Such expense consists primarily of
salaries and employee benefits, professional fees, and amortization of
Reorganization Value.
Item 2. Management"s Discussion and Analysis of Financial Condition and Results
of Operations
The statements contained in this quarterly report on Form 10-Q that are not
historical facts are forward-looking statements subject to the safe harbor
created by the Private Securities Litigation Reform Act of 1995. The Company
cautions readers of this quarterly report on Form 10-Q that a number of
important factors could cause the Company's actual results in Fiscal 2001 and
beyond to differ materially from those expressed in any such forward-looking
statements. These factors include, without limitation, the general economic and
business conditions affecting manufacturing businesses, actions of a variety of
domestic and foreign competitors, changes in demand in the primary markets of
JPS, the seasonality of the Company's sales, changes in the Company's costs of
claims, raw materials and energy, and the Company's dependence on key personnel.
The following should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" appearing in the
Company's Annual Report on Form 10-K for the fiscal year ended October 28, 2000.
RESULTS OF OPERATIONS
Introduction
The Company has repositioned itself from one that was largely textile-oriented
to a diversified manufacturing and marketing company that is focused on a broad
array of industrial applications. On November 17, 2000, the Company sold its
Apparel Division, thereby completely exiting the textile business. The Company
is now focusing solely on improving the performance and profitability of its
remaining core businesses: JPS Elastomerics and JPS Glass.
Three Months Ended July 28, 2001 (the "2001 Third Quarter") Compared to the
Three Months Ended July 29, 2000 (the "2000 Third Quarter")
Consolidated net sales decreased $8.9 million, or 20.3%, from $43.8 million in
the 2000 third quarter to $34.9 million in the 2001 third quarter. Operating
profit decreased $1.7 million from an operating profit of $3.8 million in the
2000 third quarter to an operating profit of $2.1 million in the 2001 third
quarter.
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Net sales in the 2001 third quarter in the Elastomerics segment, which includes
single-ply roofing, environmental membrane, and extruded urethane products,
decreased $2.5 million, or 11.1%, from $22.4 million in the 2000 third quarter
to $19.9 million in the 2001 third quarter. This decrease is primarily
attributable to lower product demand as a result of the general economic
slowdown.
Operating profit for the Elastomerics segment decreased $0.8 million from $1.8
million in the 2000 third quarter to $1.0 million in the 2001 third quarter. The
decrease is due to lower contribution from sales and higher manufacturing,
utility, and insurance costs.
Net sales in the Glass segment, which includes mechanically-formed substrates
constructed of synthetics and fiberglass for electronic components, construction
products, aerospace components, industrial insulation, and filtration
applications decreased $7.9 million, or 34.3%, from $22.9 million in the 2000
third quarter to $15.0 million in the 2001 third quarter. The decrease resulted
from dramatically lower demand levels for the Company's electronic substrate
products partially offset by stronger demand for some of the Company's other
industrial products.
Operating profit for the Glass segment decreased $0.9 million from $1.9 million
in the 2000 third quarter to $1.0 million in the 2001 third quarter. This
decrease reflects lower contribution from sales and higher manufacturing,
utility, and insurance costs.
Interest expense in the 2001 third quarter was $0.4 million less than the 2000
third quarter as a result of lower debt levels and interest rates.
Nine Months Ended July 28, 2001 (the "2001 Nine-Month Period") Compared to the
Nine Months Ended July 29, 2000 (the "2000 Nine-Month Period")
Consolidated net sales decreased $6.9 million, or 5.8%, from $120.0 million in
the 2000 nine-month period to $113.1 million in the 2001 nine-month period.
Operating profit decreased $1.5 million from $9.8 million in the 2000 nine-month
period to $8.3 million in the 2001 nine-month period.
Net sales in the 2001 nine-month period in the Elastomerics segment decreased
$0.7 million, or 1.2%, from $61.4 million in the 2000 nine-month period to $60.7
million in the 2001 nine-month period. This decrease is primarily attributable
to lower product demand as a result of the general economic slowdown beginning
in the third quarter.
Operating profit for the Elastomerics segment decreased $2.1 million from $5.3
million in the 2000 nine-month period to $3.2 million in the 2001 nine-month
period. This decrease is due to lower contribution from sales and higher
manufacturing, utility, and insurance costs.
Net sales in the Glass segment decreased $10.3 million, or 16.4%, from $62.7
million in the 2000 nine-month period to $52.4 million in the 2001 nine-month
period. The decrease is primarily attributable to lower demand for the Company's
electronic substrate products.
Operating profit for the Glass segment increased $0.5 million from $4.5 million
in the 2000 nine-month period to $5.0 million in the 2001 nine-month period as a
result of cost reduction efforts, quality enhancements, and improved operating
efficiencies offsetting lower contribution from sales and higher insurance and
utility costs.
Interest expense in the 2001 nine-month period was $1.9 million compared to $2.5
million in the 2000 nine-month period, reflecting lower debt levels and interest
rates.
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LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of liquidity for operations and expansion are
funds generated internally and borrowings under its Revolving Credit Facility.
See Note 3 for additional discussion of the revolving credit facility.
Year to date for 2001, cash provided by operating activities was $7.1 million.
Working capital, excluding assets held for sale, at October 28, 2000 was $28.7
million compared with $30.0 million at July 28, 2001. Accounts receivable
decreased by $5.3 million from October 28, 2000 to July 28, 2001 due to timing
and sales levels. Inventories increased $0.3 million from October 28, 2000 to
July 28, 2001. Accounts payable and accrued expenses decreased by $10.0 million
from October 28, 2000 to July 28, 2001 as a result of payment of Fiscal 2000
Incentive Compensation and lower general payables.
The principal uses of cash in 2001 were for capital expenditures of $5.7 million
to upgrade the Company's manufacturing operations and the repayment of long-term
debt of approximately $28.2 million. The Company also used $2.1 million to
repurchase outstanding shares of its common stock. On November 17, 2000, the
Company received approximately $27.5 million in proceeds from the sale of its
Apparel division as discussed under the caption "Fiscal 2000 Compared With
Fiscal 1999" in the Company's Annual Report on Form 10-K for the fiscal year
ended October 28, 2000. Such funds were used to reduce the Company's outstanding
indebtedness under its Revolving Credit Facility and certain equipment loans.
The Company anticipates that its total capital expenditures in Fiscal 2001 will
be approximately $6 million and expects such amounts to be funded by cash from
operations and bank financing sources.
Based upon the ability to generate working capital through its operations and
its new Revolving Credit Facility, the Company believes that it has the
financial resources necessary to pay its capital obligations and implement its
business plan.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk. The Company has exposure to interest rate changes primarily
relating to interest rate changes under its Revolving Credit Facility. The
Company"s Revolving Credit Facility bears interest at rates which vary with
changes in the London Interbank Offered Rate (LIBOR). The Company does not
speculate on the future direction of interest rates. Currently, all of the
Company"s debt bears interest at the 30-day LIBOR rate plus an applicable margin
based upon the Company's debt to EBITDA ratio. The Company believes that the
effect, if any, of reasonably possible near-term changes in interest rates on
the Company"s consolidated financial position, results of operations, or cash
flows would not be material.
Raw material price risk. A portion of the Company"s raw materials are
commodities and are, therefore, subject to price volatility caused by weather,
production problems, delivery difficulties, and other factors which are outside
the control of the Company. In most cases, essential raw materials are available
from several sources. For several raw materials, however, branded goods or other
circumstances may prevent such diversification and an interruption of the supply
of these raw materials could have a significant impact on the Company"s ability
to produce certain products. The Company has established long-term relationships
with key suppliers and may enter into purchase contracts or commitments of one
year or less for certain raw materials. Such agreements generally include a
pricing schedule for the period covered by the contract or commitment. The
Company believes that any changes in raw material pricing, which cannot be
adjusted for by changes in its product pricing or other strategies, would not be
significant.
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JPS INDUSTRIES, INC.
PART II - OTHER INFORMATION
Item
----
1. Legal Proceedings None
2. Changes in Securities None
3. Defaults Upon Senior Securities None
4. Submission of Matters to a Vote of Stockholders None
5. Other Information None
6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
(11) Statement re: Computation of Per Share Earnings - not
required since such computation can be clearly determined
from the material contained herein.
(b) Current Reports on Form 8-K:
(i) No reports on Form 8-K were filed for the Third Quarter ended July
28, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JPS INDUSTRIES, INC.
Date: September 7, 2001 /s/ Charles R. Tutterow
-----------------------------------------
Charles R. Tutterow
Executive Vice President, Chief Financial
Officer and Secretary
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