Item 1. Business
Tultex Corporation is a Virginia corporation engaged principally in the business of manufacturing and selling textile products. The company is a vertically integrated producer of fleece and jersey activewear and leisure time apparel. It operates apparel plants in Virginia, North Carolina, Indiana, Massachusetts and Jamaica, and yarn plants in North Carolina.
The principal products of the company are knitwear items of various kinds for work and casual wear such as sweatshirts, jogging suits, hooded jackets, headwear and T-shirts. The company manufactures apparel products under Tultex (Registered Trademark), Tultex Maximum Sweats (Registered Trademark), Tultex Super Weights (Registered Trademark), Discus Athletic (Registered Trademark), Universal (Registered Trademark), Logo 7 (Registered Trademark), Logo Athletic (Registered Trademark) and Competitor (Registered Trademark) brand labels and private labels. In 1991, the company was licensed to manufacture and market adult fleecewear under the Brittania (Registered Trademark) label owned by Levi Strauss & Co. These products are distributed at wholesale through company sales offices and manufacturers' representatives throughout the United States and abroad, primarily to discount and chain stores, mail houses, screenprinters and contract customers. The total revenues of the company were $533,611,000 in 1993, $503,946,000 in 1992 and $349,910,000 in 1991. In 1993, sales in the last half of the year were 64% compared to 68% and 71% in the last half of 1992 and 1991, respectively. The company has over 4,400 customers. No single customer accounted for 10% of consolidated net sales in fiscal 1993. Total sales to the five largest customers were $186,253,000 in 1993, $175,581,000 in 1992 and $121,555,000 in 1991.
The company's products are manufactured in 12 plants in Virginia and North Carolina, one plant in Indiana, one plant in Massachusetts and one plant in Jamaica, operated by the company's wholly-owned subsidiary, AKOM, Ltd., a Cayman Islands, B.W.I corporation. The company also operates a maquiladora sewing operation in Mexico. These products are marketed by the company through its national sales organization and designated sales representatives. The Customer Service Center has centralized the storage of most nondecorated garments and provides a means of automatic storage and retrieval, supporting packing and shipping operations, resulting in improved inventory management and customer service. Currently the company stores goods in 6 warehouses.
The company's traditional business is to market fleece and jersey knit activewear with an emphasis on sales of basic style garments in high-volume markets. The company's marketing methods are typical of producers of basic clothing products. Its merchandising department keeps abreast of current fashionable styles and colors. After internal reviews by manufacturing departments, selected customers preview and comment upon prototype garments before the merchandising department determines those to be presented in sales catalogs. Production is planned on orders received and anticipated customer orders for these garments.
The company is a major manufacturer and marketer of fleeced knitwear and a significant competitor in this market, although its exact competitive position is unknown. While management estimates that there are five major domestic competitors in the fleeced knit activewear segment of the apparel industry, the company's products compete with all clothing which is used for the same general purposes by the consumer. Competition from both domestic and foreign apparel manufacturers is intense and, although brand awareness by the consumer appears to be developing in importance, price remains the principal competitive factor.
The 1992 acquisitions of Logo 7 and Universal Industries, now a part of Logo 7, have made the company a major competitor in the licensed sports apparel business, one of the fastest growing portions of the apparel industry. Logo 7 decorates garments using silkscreening or embroidery and markets decorated headwear. Logo 7 is a licensee of the National Football League, National Basketball Association, National Hockey League and Major League Baseball for the manufacturing and marketing of certain apparel products bearing logos of teams that are a part of those organizations.
Logo 7's apparel product lines include T-shirts, golf shirts and sweaters, basic fleece products, shorts, fashion fleece, jerseys, wind suits, and jackets. Most items are sold in a relatively broad range of colors, due to requirements to match the relevant team colors. In the silkscreening process, Logo 7 uses automatic silkscreen machines and dryers for longer runs and hand-operated presses for shorter or more complicated runs. The embroidery is carried out using high-speed, computerized Tajima stitching equipment. Generally production is tied to specific orders, although during the slower times of the year, some production is devoted to restocking small quantities of finished items which Logo 7 keeps in its inventory. The completed garments are folded and packed by hand and are typically dispatched within 24 hours.
Logo 7 also decorates, designs and markets headwear to sporting goods stores and major retailers throughout the United States. Logo 7 obtains 80% of its headwear product line from the Far East with the remainder sourced domestically. The company maintains non-exclusive domestic licenses with professional sports organizations and major colleges for the right to use team logos and graphics. In addition, Logo 7 maintains several "toy/character/entertainment" licenses and numerous corporate licenses. The company also markets nondecorated hats to team dealers and children's headwear.
The company's yarn operations produce cotton and cotton-synthetic blended yarns of various counts. The yarn produced is principally consumed internally by the company's apparel operation.
The company's facilities for manufacturing have adequate capacity to support the annual sales growth objective for 1994. The current nondecorated order backlog was estimated at approximately $57,000,000 at the end of 1993, a decrease of approximately $29,000,000 from the end of the prior year. Backlogs were computed from orders on hand at the last day of each fiscal year. Management cautions that due to the typical second-half seasonality of the activewear business, year-end order backlogs are not a reliable indicator of sales volume for the coming year. Additionally, customers are now ordering closer to the retail selling season than in the past to shorten lead times and minimize inventory risk.
The company attempts to minimize the seasonal sales effects on manufacturing operations by producing a portion of its fall line in spring and summer for sales in the following fall and winter months. The outerwear T-shirts line introduced in 1990 and the addition of headwear through the acquisition of Universal Industries in 1992 are intended to promote additional first-half shipments of the company products.
The principal raw materials are cotton and synthetic fibers, dyes and chemicals. Approximately 9% of the spun yarns in our apparel products is purchased from yarn vendors. These yarns and the dyes and chemicals are purchased at competitive prices from numerous suppliers.
Dominion Stores, Inc., a wholly-owned subsidiary, operates fourteen retail stores in North Carolina, Virginia and West Virginia, which sell surplus company apparel and apparel items of other manufacturers, and thirty-three retail stores in twenty-one states which sell first quality company-made products and accessory items.
Tultex Canada, Inc. is a subsidiary that commenced operation in 1990 as part of the company's initial expansion into international markets. In 1992, an agreement was also signed with Nissan Trading Co., Ltd., a subsidiary of Nissan Motor Co., to market and sell Tultex products in Japan. While international sales were immaterial in 1993, both of these ventures experienced strong double digit sales growth over the prior year.
General
Expenditures for research and development in fiscal 1993 were insignificant.
Approximately 7,000 persons are employed by the company. No Tultex employees are represented by a labor union.
The company, along with other apparel manufacturers in the area, returns dyeing wastes for treatment to the City of Martinsville's municipal effluent systems. These treated dyeing wastes do not pose environmental risks. In 1989, the city adopted a plan for removing the coloration, caused by the dye wastes, from the water by using polymer chemicals to combine with the extremely small particles of the dye to create a sludge-like substance that can be retrieved from the water at the city's wastewater treatment plant. To cover the cost to the city, each company pays 50 to 80 cents per thousand gallons of water above regular water costs for its portion of the expense. The expenditures required do not have a material effect on the company's earnings or competitive position.
Executive Officers of the Company
Pursuant to General Instruction G to Form 10-K, the following information is furnished concerning the executive officers of the company.
Name Office Age - - ----------------- --------------------------------------------- --- J. M. Franck Chairman and Chief Executive Officer 41
C. W. Davies, Jr. President and Chief Operating Officer 45
J. J. Smith Vice President - Customer Service 51
B. A. Ratliff Vice President - Service/Quality 48
D. P. Shook Vice President - Human and Financial Services 56
W. J. Caruba Vice President - Sales & Marketing 46
S. H. Wood Controller 34
J. M. Baker Secretary - Treasurer 63
Mr. J. M. Franck became Chairman of the Board of Directors and Chief Executive Officer in January 1991. He had served as President and Chief Operating Officer of the company since December 1988 and as Vice President since January 1983. He has been on the Board of Directors since 1984.
Mr. Davies became President and Chief Operating Officer in January 1991 after serving as Executive Vice President since December 1989. From February 1988 through November 1989, he was President and Chief Executive Officer of Signal Apparel Company in Chattanooga, Tennessee. From March 1986 to February 1988, Mr. Davies was President of Little Cotton Manufacturing Company in Wadesboro, North Carolina, and from December 1984 through February 1986 was Senior Vice President of Fieldcrest-Cannon in Kannapolis, North Carolina. He has been on the Board of Directors since August 1990.
Mr. Smith became Vice President - Customer Service in September 1992. He served as Vice President - Marketing from December 1987 after serving as Director - Corporate Planning since May 1987. He was Manager - Information Systems & Services between December 1985 and May 1987.
Mr. Ratliff became Vice President - Service/Quality in April 1993 after serving as Vice President - Operations since December 1984.
Mr. Shook became Vice President - Human and Financial Services in January 1994. He served as Vice President - Finance and Administration from December 1988 after serving as Vice President - Finance from January 1987 and was Controller from December 1985 until that time.
Mr. Caruba became Vice President - Marketing in September 1992. He served as Vice President - Distribution from October 1990 after serving as General Manager - Planning from November 1989 to October 1990 and was Director - Production Control from December 1985 to November 1989.
Ms. Wood became Controller in October 1993 after serving as Team Tultex Controller since June 1993. In the ten years prior to joining the company, she was employed by Price Waterhouse in progressive audit positions culminating as Audit Senior Manager.
Mr. Baker became Secretary - Treasurer in January 1991 after serving as Director - External Reporting since August 1987. Between December 1985 and August 1987 he was Director - Budgets and Financial Reporting.
All terms of office will expire concurrently with the meeting of directors following the next annual meeting of stockholders at which the directors are elected.
Item 2.
Item 2. Properties
All facilities are of masonry construction except the buildings at Vinton, Virginia, Mattapoisett, Massachusetts and the Customer Service Center in Martinsville, Virginia, which are steel-framed metal-walled buildings constructed on a concrete slab. All buildings are well-maintained. The following table presents information relating to owned facilities.
Date of Construction or Most Recent Square Renovation Location Footage Use - - -------------- ---------------- --------- --------------------------- 1977-85 Martinsville, VA 45,200 Administrative offices
1963-87 Martinsville, VA 1,100,000 Manufacturing (apparel) and executive offices
1920 Koehler, VA 60,000 Warehousing
1965 Martinsville, VA 70,000 Warehousing
1967 South Boston, VA 130,000 Sewing (apparel)
1970 Bastian, VA 53,500 Sewing (apparel)
1907-1979 Longhurst, NC 287,000 Manufacturing (yarn)
1899-1981 Roxboro, NC 110,000 Manufacturing (yarn)
1973-1977 Rockingham, NC 60,100 Manufacturing (yarn)
1952 Dobson, NC 38,000 Manufacturing (apparel)
1966-1983 Mayodan, NC 612,000 Manufacturing, warehousing 											 and shipping (apparel)
1988 Vinton, VA 50,000 Manufacturing (apparel)
1989 Martinsville, VA 502,200 Warehousing and shipping 						 (apparel)
1985 Mattapoisett, MA 116,250 Manufacturing (apparel)
The following table presents information relating to leased facilities.
Date of Construction Lease or Most Expira- Current Recent Square tion Annual Renovation Location Footage Date Rental Use - - ------------ ---------------- ------- -------- ------- ------------- 1969 Chilhowie, VA 40,015 08/31/97 $46,200 Manufacturing 							 (apparel)
1984 Montego Bay, 66,000 Monthly 266,040 Manufacturing 		Jamaica (apparel)
1960 Marion, NC 48,760 11/02/98 95,000 Manufacturing 													 (apparel)
1982 Martinsville, VA 31,000 Monthly 18,700 Warehousing 													 (apparel)
1963 Martinsville, VA 125,000 06/30/94 235,200 Warehousing 													 (apparel)
1990 Martinsville, VA 48,000 03/31/96 146,880 Manufacturing 													 (apparel)
1992 Indianapolis, IN 650,000 04/30/97 1,404,000 Manufacturing 													 (apparel)
Company sales offices are leased in New York City, Boston, Chicago, Seattle and Los Angeles, at aggregate annual rentals of approximately $259,000. Dominion Stores, Inc. leases retail outlet stores in Virginia, North Carolina, Michigan, New York, California, Pennsylvania, Washington, Wisconsin, Ohio, West Virginia, Indiana, Maryland, Maine, Connecticut, New Hampshire, Kentucky, Tennessee, Florida, Minnesota, Oregon and Idaho at aggregate annual rentals of approximately $2,525,000.
All of the properties listed in the tables of owned and leased facilities are fully utilized by the company or its subsidiaries.
Manufacturing equipment, substantially all of which is owned by the company, includes carding, spinning and knitting machines, jet-dye machinery, dryers, cloth-finishing machines, cutting and sewing equipment, embroidery equipment, screen printing machines and automated storage/retrieval equipment. This machinery is modern and kept in good repair. In addition, the company leases a fleet of trucks and tractor-trailers which are used for transportation of raw materials and for interplant transportation of semi-finished and finished products.
The company's facilities and its manufacturing equipment are considered adequate for its immediate needs.
Item 3.
Item 3. Legal Proceedings.
None.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
PART II
Item 5.
Item 5. Market for Registrant's Common Stock and Related Stockholder Matters.
As of March 14, 1994 there were 3,479 record holders of the Company's common stock. Other information required by Item 5 of Form 10-K appears under the heading "Common Stock Prices and Dividend Information" on page 32 and in "Note 7" of "Notes to Financial Statements" on page 23 of the company's 1993 Annual Report to Stockholders and is incorporated herein by reference.
Item 6.
Item 6. Selected Financial Data.
The following table presents selected finanical date of Tultex Corporation. This historical data should be read in conjunction with the Consolidated Financial Statements and the related notes thereto in Item 8 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7.
Item 7.Prior years have been restated to reflect the acquisition of Universal Industries, Inc. treated as a pooling of interests, and to reflect a change in accounting method from LIFO to FIFO.
						 *As adjusted for stock splits, stock dividends and shares issued in pooling- of-interests acquisition of Universal Industries, Inc.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Management's Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
The financial results for the first six months of 1992 and all prior periods presented have been restated to include Universal Industries, Inc., acquired by Tultex in June 1992 through an exchange of stock accounted for as a pooling ofinterests. In addition, the company changed its method of determining cost of inventories from the last-in, first-out (LIFO) method to the first-in, first-out (FIFO) method during the fourth quarter of 1993. This change has been applied by retroactively restating all prior periods presented. The following table presents the company's consolidated income statement items as a percentage of sales.
			 Percentage of Net Sales 			 ------------------------------------------------- 			 Jan. 1, 1994 Jan. 2, 1993 Dec. 28, 1991 			 (52 weeks) (53 weeks) (52 weeks) 			 ------------ ------------ ------------- Net sales and other income 100.0% 100.0% 100.0% 			 ------------ ------------ ------------- Cost of products sold 74.1 73.0 77.5
Depreciation 4.4 4.2 5.0
Selling, general and administrative 16.6 16.1 13.0
Loss (gain) on sale of assets - - (1.2)
Interest 3.2 2.7 2.6 			 ------------ ------------ ------------- Total costs and expenses 98.3 96.0 96.9 			 ------------ ------------ ------------- Income before taxes 1.7 4.0 3.1
Income taxes .6 1.4 .2* 			 ------------ ------------ ------------- Net income 1.1% 2.6% 2.9% 			 ------------ ------------ -------------
*Includes the cumulative effect recognition of SFAS No.96 "Accounting for Income Taxes" adopted as of first quarter 1991.
Net sales and other income for the year ended January 1,1994, increased $30 million or 6% from 1992 which increased $154 million or 44% from 1991. The 1993 sales growth was due to a 24% increase in sales of the company's Logo 7 subsidiary partially offset by lower nondecorated apparel sales. The 1992 sales increase was primarily due to sales of Logo 7 which was acquired by the company as of January 1, 1992. Unit sales volume of nondecorated apparel in 1993 was relatively unchanged from prior year levels, while the average selling price decreased 2%. The 1993 average price decline of nondecorated products was primarily due to proportionately higher shipping volume of jersey products which sell at lower prices than fleece garments. Unit sales volume and average pricing in 1992 each increased 3% from 1991.
The company's nondecorated apparel order backlog at January 1, 1994 was $57 million versus $86 million at January 2, 1993. This 34% decrease reflects a significant decline in demand for activewear in the latter half of 1993 that is expected to continue through the first six months of 1994. This decrease in demand has resulted in higher manufacturer inventories compared to last year. The company currently plans to operate reduced work schedules to better align inventories with demand. The combination of lower sales and increased product costs due to lower production volume are expected to negatively impact net income for the first six months of 1994 compared to the first half of 1993.
Costs of products sold as a percentage of sales increased from 73% for fiscal year 1992 to 74% for 1993. The increase in cost of products sold as a percentage of sales was primarily due to heavier fabric weights, greater sewing detail for nondecorated products, strong decorated apparel sales growth with mass merchandisers which generally yield lower margins, and expenses associated with streamlining operations. The increase in jersey sales, which traditionally yield lower margins than fleece, has also increased cost of products sold as a percentage of sales. Total apparel production for 1993 decreased 3% from the comparable period of 1992. The company expects a significant increase in raw cotton prices during 1994 due to lower than anticipated cotton yields.
Depreciation as a percentage of net sales was 4% for 1993 and 1992. Depreciation expense in 1993 increased 12% over last year, and in 1992 depreciation grew 20% over 1991. The 1993 increase was primarily due to expenditures for machinery and equipment.
Selling, general and administrative (S,G&A) expenses increased as a percentage of sales from 16% in 1992 to 17% in 1993. S,G&A expenses in 1993 increased $7 million or 9% compared to 1992. The primary reason for the S,G&A increase was a $5 million increase in royalty expenses related to higher sales of professional sports licensed apparel. In 1992, S,G&A expenses increased $36 million or 79% compared to 1991. This increase was generated by the effect of the aforementioned acquisition of Logo 7 and increased advertising expense due to promotion of the Tultex and Discus Athletic brands.
Interest expense was 3% of sales for 1993 and 1992. Interest expense was $17 million for 1993 compared to $14 million for 1992. The increase was primarily the result of higher debt due to increased working capital needs and the acquisition of Logo 7. The company has experienced increased working capital needs due to higher inventory levels and extended payment terms for our customers.
The provision for income taxes is a function of pretax earnings and the combined effective rate of federal and state income taxes. The effective rate for combined federal and state income tax was 35% in 1993, 35% in 1992 and 32% in 1991. The lower rate for 1991 was the result of permanent differences between book and tax income and their increased percentage relationship to relatively low pretax earnings.
Sales for Logo 7 for 1993 increased 24% from the previous year. Logo 7 manufactures and markets decorated activewear encompassing a broad range of products, such as T-shirts, fleecewear, jackets, windsuits and headwear. Logo 7 offers these screenprinted and embroidered apparel items under licenses from all major professional sports, colleges and certain entertainment industries. Since Logo 7 is primarily positioned in the licensed sports apparel business, a portion of the success of the company is tied to the fortunes of sports teams. In 1993, the Dallas Cowboys victory in the Superbowl and the Chicago Bulls again winning the NBA Championship were positive factors in the annual financial performance. Troy Aikman of the Dallas Cowboys is a representative for our Logo Athletic branded products. Logo 7 is adding National Basketball Association rookie Chris Webber and National Hockey League All-Star Chris Chelios as representatives to broaden appeal of the Logo Athletic brand. Logo 7 is introducing the Driver's Club for NASCAR racing fans in 1994 and has obtained the license rights to 1994 World Cup Soccer played at various venues in the United States, as well as rights to the 1996 Summer Olympic Games to be held in Atlanta.
The company foresees significantly higher sales volume of nondecorated jersey products during 1994 through improved utilization of existing capacity. Increased jersey manufacturing capacity is enabling the company for the first time in 1994 to offer this product to major retail accounts. Increased sales are also expected for the company's upscale Discus Athletic brand as a result of aggressive marketing in the department store and specialty shop channels. The Discus Athletic brand of fleece and T-shirts is a sponsor of Men's Atlantic Coast Conference Basketball for 1994 through 1996. Discus Athletic commercials will be shown during every regular season game, as well as the conference tournament. The company's basic nondecorated fleece product sales were disappointing for 1993 and shipment volume is expected to be relatively flat in 1994. Efforts to reduce seasonality are somewhat encouraging due to continued growth of jersey products, headwear and windsuits. Despite this improvement, 1994 is expected to follow the same general pattern of quarterly sales and earnings as evidenced in past years due to the seasonal nature of fleece products. The company is cautious concerning 1994. Competition in the industry is intense with price decreases anticipated due to higher manufacturer inventory levels compared to last year throughout the industry. The company's operating schedules and financial performance for the first six months of 1994 will be negatively impacted until these inventory levels are reduced to more conventional levels.
The company continues to seek ways to lower costs, increase efficiency and improve product quality. Strategic Process Management teams have been formed to review critical processes in the company and pinpoint probable opportunities for significant improvement. This ongoing program is expected to result in initial cost reductions during 1994. In addition, the company has begun streamlining operations which will result in reduced labor and related benefit expenses during 1994. These cost reduction efforts will help offset pricing pressures from current competitive conditions during 1994.
Financial Condition, Liquidity and Capital Resources Net working capital at January 1, 1994 increased $117 million from year-end 1992, as inventories and accounts receivable increased and working capital debt was moved from current liabilities to long-term debt due to replacement of the company's short-term bank lines with a $225 million, two-year revolving credit facility.
Due to the seasonality of fleecewear shipments, receivables normally peak in September and October and begin to decline in December as shipment volume decreases and cash is collected. Accounts receivable increased $7 million from January 2, 1993 to January 1, 1994. The average number of days' sales in receivables was 77 for 1993 compared to 73 for 1992. This increase was due to the aforementioned extended terms taken by our customers.
Inventories increased $27 million compared to year-end 1992 as a result of lower than expected sales unit volume due to the industry downturn. The average days' sales in inventory on hand at year-end 1993 increased 13% from January 2, 1993; and at year-end 1992, the average number of days' sales in inventory on hand increased 21% from December 28, 1991. The current ratio at year-end was 6.4, 2.0 and 2.0 for 1993, 1992 and 1991, respectively. The 1993 increase was the result of the aforementioned revolving credit facility which is classified as long-term debt.
On October 6, 1993, the company entered into a $225 million revolving credit facility which replaced its short-term credit lines. This agreement, which has a two-year maturity with three annual options to renew, provides for the company's working capital needs. Average borrowings under this facility during the fourth quarter were $167 million at an average annual rate of 3.9%. The highest single day balance reached during the quarter was $190 million. Outstanding letters of credit under this facility at January 1, 1994 were $10 million. Long-term debt at January 1,1994 increased $112 million compared to year-end 1992 due to $121 million outstanding under the revolving credit facility partially offset by reclasses to current portion of long-term debt and regularly scheduled payments. At year end, the company had obtained waivers for one loan covenant violation with several lenders. The company has obtained amendments for certain loan covenants for 1994. These amendments will provide for greater flexibility during the current period of decreased demand.
At January 1, 1994, there were no notes payable to banks under short-term lines of credit. At January 2, 1993, the comparable amount was $80 million. The decrease was due to the company's aforementioned revolving credit facility. Short-term borrowings outstanding averaged $92 million, $81 million and $68 million for 1993, 1992 and 1991, respectively, at average annual interest rates of 3.7%, 4.4% and 6.4%. The highest single-day balance reached each year was $186 million in 1993, $114 million in 1992 and $107 million in 1991. In 1993, net cash used by operating activities of $6 million primarily related to a $27 million increase in inventories and a $7 million increase in accounts receivable partially offset by depreciation of $23 million and net income of $6 million. Cash used by investing activities of $24 million was primarily used to finance additions to fixed assets. Cash provided by financing activities of $33 million was derived principally from increased long-term debt of $121 million partially offset by an $80 million reduction in short-term debt. Planned capital expenditures for 1994 are $14 million. The company expects annual cash flows from income and non-cash items, supplemented by the new revolving credit facility, to support its seasonal working capital requirements in 1994.
Stockholders' equity was $179 million at year-end 1993, $179 million at year-end 1992 and $157 million at year-end 1991. Stockholders' equity remained relatively constant from January 2, 1993 to January 1, 1994 since net income of $6 million and proceeds from the exercise of stock options of $1 million were offset by cash dividends declared of $7 million. The return on average stockholders' equity was 3% in 1993, 8% in 1992 and 7% in 1991.
Item 8.
Item 8. Financial Statements and Supplementary Data.
TULTEX CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
									Page 									---- Consolidated statements of Income 13 Consolidated Balance Sheets 15 Consolidated Statements of Cash Flows 17 Consolidated Statements of Changes in Stockholders' Equity 19 Notes to Consolidated Finanical Statements 20 Report of Independent Public Accountants 36
Tultex Corporation Consolidated Statements of Income (In thousands of dollars excepts per share data)
Fiscal years ended: Jan. 1, 1994 Jan. 2, 1993 Dec. 28, 1991 				 (52 weeks) (53 weeks) (52 weeks) 				 ------------ ------------ -------------
Net sales and other income $ 533,611 $ 503,946 $ 349,910 							 ------------ ------------ ------------- Cost and expenses:
Cost of products sold 395,727 368,027 271,243
Depreciation 23,364 20,831 17,369
Selling, general and administrative 88,433 81,297 45,481
Gain on sale of facilities -- -- (4,014)
Interest 16,996 13,540 9,064 	 			 ------------- ------------ -------------
Total costs and expenses 524,520 483,695 339,143 	 			 ------------ ------------ ------------- Income before income taxes and cumulative effect of a change in accounting principle 9,091 20,251 10,767
Provision for income taxes (Note 9) 3,188 7,060 3,443 				 ------------ ------------ -------------
Income before cumulative effect of a change in accounting principle 5,903 13,191 7,324
Cumulative effect of a change in accounting principle (Note 9) -- -- 2,848 	 			 ------------ ------------ ------------- Net Income $ 5,903 $ 13,191 $ 10,172 				 ------------ ------------ -------------
Fiscal years ended: Jan. 1, 1994 Jan. 2, 1993 Dec. 28, 1991 				 (52 weeks) (53 weeks) (52 weeks) 			 ------------ ------------ ------------- Earnings per share:
Income before cumulative effect of a change in accounting principle $ .16 $ .42 $ .25
Cumulative effect of a change in accounting principle (Note 9) -- -- .10 				 ------------ ------------ -------------
Net Income per Common Share $ .16 $ .42 $ .35 				 ------------ ------------ -------------
Dividends per Common Share (Note 7) $ .20 $ .20 $ .32 				 ------------ ------------ -------------
The accompanying Notes to Financial Statements are an integral part of this statement.
Tultex Corporation Consolidated Balance Sheets (In thousands of dollars except share data)
Assets Jan. 1, 1994 Jan. 2, 1993 											 ------------ ------------ Current assets: Cash and equivalents (Note 5) $ 6,754 $ 3,603 Accounts receivable, less allowance for doubtful accounts and returns of $2,374 (1993) and $2,360 (1992) 116,383 109,880 Inventories (Note 3) 157,278 130,166 Prepaid Expenses 8,276 5,678 											 ------------ ------------ Total current assets 288,691 249,327 											 ------------ ------------ Property, plant and equipment, net of depreciation (Note 4) 151,775 153,188 Intangible assets 27,983 29,200 Other assets 6,516 4,103 											 ------------ ------------ Total Assets $ 474,965 $ 435,818 											 ============ ===========
Liabilities and Stockholders' Equity Jan. 1, 1994 Jan. 2, 1993 											 ------------ ------------ Current liabilities: Notes payable to banks (Note 5) $ -- $ 79,825 Current maturities of long-term debt (Note 6) 8,524 2,268 Accounts payable-trade 18,170 16,977 Accrued liabilities-other 13,923 15,914 Dividends payable (Note 7) 1,736 1,728 Income taxes payable 2,785 5,898 											 ------------ ------------ Total current liabilities 45,138 122,610 											 ------------- ------------ Long-term debt, less current maturities (Note 6) 230,914 118,438 										 	 ------------ ------------ Deferrals: Deferred income taxes (Note 9) 14,014 12,134 Other 5,702 3,843 										 	 ------------ ------------- Total deferrals 19,716 15,977 											 ------------ ------------ Stockholders' equity (Notes 6, 8, 15 and 16): 5% cumulative preferred stock, $100 par value; authorized-22,000 shares, issued and outstanding-1,975 shares (1993 and 1992) 198 198 Series B, $7.50 cumulative convertible preferred stock; issued and outstanding-150,000 shares (1993 and 1992) 15,000 15,000 Common stock, $1 par value; authorized- 60,000,000 shares, issued and outstanding- 29,053,126 shares (1993) and 28,877,526 shares (1992) 29,053 28,878 Capital in excess of par value 1,889 681 Retained earnings 133,107 134,136 											 ------------ ------------ 											 179,247 178,893 Less notes receivable from stockholders 50 100 											 ------------ ------------ Total stockholders' equity 179,197 178,793
Commitments and contingencies (Notes 12, 13 and 14)
Total Liabilities and Stockholders' Equity $ 474,965 $ 435,818 											 ============ ============
The accompanying Notes to Financial Statements are an integral part of this statement.
Tultex Corporation Consolidated Statements of Cash Flows (In thousands of dollars)
Fiscal years ended Jan. 1, 1994 Jan. 2, 1993 Dec. 28, 1991 				 (52 weeks) (53 weeks) (52 weeks) 			 ------------ ------------ ------------- Operating Activities: Net income $ 5,903 $ 13,191 $ 10,172 Items not requiring (providing) cash: Depreciation 23,364 20,831 17,369 Gain on sale of facilities -- -- (4,014) Deferred income taxes 1,880 (234) 3,815 Amortization of excess of fair value of assets acquired over cost -- (280) (865) Amortization of intangible assets 1,217 1,217 -- Other deferrals 1,859 1,982 1,051 Cumulative effect of a change in accounting principle -- -- (2,848)
Changes in assets and liabilities: Accounts receivable (6,503) (17,685) (3,921) Inventories (27,112) (25,461) 9,380 Prepaid expenses (2,598) (2,227) (151) Accounts payable and accrued expenses (790) 1,139 (6,044) Income taxes payable (3,113) 2,690 (2,548) 				 ------------ ------------ ------------- Cash provided (used) by operating activities (Notes 3, 6 and 9) (5,893) (4,837) 21,396
Investing Activities: Additions to property, plant and equipment (22,250) (30,330) (14,360) Change in other assets (2,413) 113 (1,179) Sales and retirements of property and equipment 299 182 10,951 Acquisition of assets and certain liabilities of Logo 7 -- (57,756) -- 				 ------------ ------------ ------------- Cash provided (used) by investing activities (24,364) (87,791) (4,588) 				 ------------ ------------ -------------
				 				 Jan. 1, 1994 Jan. 2, 1993 Dec. 28, 1991 				 (52 weeks) (53 weeks) (52 weeks) 				 ------------ ------------ ------------- Financing Activities: Issuance (payment) of short-term borrowings (79,825) 24,063 12,463 Issuance of long-term debt 121,000 140,000 24 Payments of long-term debt (2,268) (79,156) (20,524) Preferred stock issued -- 15,000 -- Cash dividends (Note 7) (6,932) (6,690) (8,841) Proceeds from exercise of stock options 1,433 201 469 Other -- -- (10) 				 ------------ ------------ ------------- Cash provided (used) by financing activities 33,408 93,418 (16,419) 				 ------------ ------------ ------------- Net increase (decrease) in cash and equivalents 3,151 790 389
Cash and equivalents at beginning of year 3,603 2,813 2,424 				 ------------ ------------ ------------- Cash and Equivalents at End of Year $ 6,754 $ 3,603 $ 2,813 				 ============ ============ =============
The accompanying Notes to Financial Statements are an integral part of this statement.
Tultex Corporation Consolidated Statement of Changes in Stockholders' Equity (In thousands of dollars except share data)
The accompanying Notes to Financial Statements are an integral part of this statement.
Notes to Consolidated Financial Statements.
Tultex Corporation Fiscal years ended January 1, 1994, January 2, 1993 and December 28, 1991.
Note 1--Accounting Policies The significant accounting policies followed by Tultex Corporation and its subsidiaries in preparing the accompanying consolidated financial statements are as follows:
Basis of Consolidation: The consolidated financial statements include the accounts of the company and its subsidiaries. All significant intercompany balances and transactions are eliminated in consolidation.
Cash and Equivalents: The company considers cash on hand, deposits in banks, certificates of deposit and short-term marketable securities as cash and equivalents for the purposes of the statement of cash flows.
Inventories: Inventories are recorded at the lower of cost or market, with cost determined on the first-in, first-out (FIFO) method. See Note 3 for information concerning the change in the method of valuing inventories from the last-in, first-out (LIFO) method to the FIFO method during 1993.
Property, Plant and Equipment: Land, buildings and equipment are carried at cost. Major renewals and betterments are charged to the property accounts while replace-ments, maintenance and repairs which do not improve or extend the lives of the respective assets are expensed currently. Gain or loss on retirement or disposal of individual assets is recorded as income or expense.
Depreciation is provided on the straight-line method for all depreciable assets over their estimated useful lives as follows:
Classification Estimated Useful Lives - - -------------------------- ---------------------- Land improvements 20 years Buildings and improvements 12-50 years Machinery and equipment 3-20 years
Capitalized Interest: Interest is capitalized on major capital expenditures during the period of construction. Total interest costs incurred and amounts capitalized for the fiscal years were:
(In thousands Jan. 1, Jan. 2, Dec. 28, of dollars) 1994 1993 1991 			 ------- ------- -------- Total interest $16,996 $13,540 $11,414 Interest capitalized -- -- (2,350) 			 ------- ------- -------- Net interest expense $16,996 $13,540 $ 9,064 			 ======= ======= ========
Intangible Assets: Goodwill and licenses are being amortized on a straight-line basis over 25 years.
Pensions: Pension expense includes charges for amounts not less than the actuarially determined current service cost plus amortization of prior service costs over 30 years. The company funds amounts accrued for pension expense not in excess of the amount deductible for federal income tax purposes.
Revenue Recognition: The company recognizes the sale when the goods are shipped or ownership is assumed by the customer.
Income Taxes: Income taxes are provided based upon income reported for financial statement purposes. Deferred income taxes reflect the tax effect of temporary differences between financial and taxable income.
Net Income per Share: Net income per common share is computed using the weighted average number of common shares outstanding during the period after giving retroactive effect to stock splits and stock dividends after deducting the preferred dividend requirements which accrued during the period.
Segment Information: The company is a vertically integrated manufacturer and marketer of activewear and leisure-time apparel which is considered a single business segment.
Fiscal Year: The company's fiscal year ends on the Saturday nearest to December 31, which periodically results in a fiscal year of 53 weeks. The Universal Industries subsidiary historically observed a calendar year. The difference in the year-ends was considered to be immaterial on the pooled financial results contained in this report. Universal Industries, Inc. adopted the fiscal year-end and quarterly reporting periods of Tultex as of the acquisition date.
Other Postretirement Benefits: As further described in Note 10, the company changed its accounting for the costs of certain life insurance and medical benefits for eligible retirees and dependents in 1993.
Note 2--Mergers and Acquisitions
On January 31, 1992, effective as of January 1, 1992, the company acquired assets, certain liabilities, contracts and licenses of Logo 7, Inc., a major producer and marketer of licensed sports apparel, for a purchase price of approximately $58 million, consisting of $15 million (stated value) of a new series of Cumulative Convertible Preferred Stock, $7.50 Series B and $43 million cash. The $43 million cash was obtained with a 17-month interim loan from two banks which was prepaid without penalty. The company obtained permanent financing on June 26, 1992. The results of Logo 7, Inc. are included in the company's consolidated statement of income for 1992. The purchase price of $58 million has been allocated to the various acquired assets. Goodwill of $4 million was determined and is being amortized over 25 years on a straight-line basis. Logo 7, Inc., which was a Subchapter S corporation, reported audited net sales of $92 million and earnings before taxes of $3 million for the 12 months ended December 31, 1991. Logo 7, Inc. had stockholders' equity of $14 million at December 31, 1991. The following pro forma results for 1991 include Logo 7, and do not purport to be indicative of the results of operations that actually would have resulted had the combination been in effect for the fiscal year or that may result in the future. Also included in these 1991 results is Universal Industries, Inc. which was acquired in June 1992 and accounted for as a pooling of interests.
(In thousands of dollars Pro Forma except per share data) 1991 (Unaudited) 					---------------- Net sales and other income $427,699
Income before cumulative effect of a change in accounting principle 5,181
Net income 8,029
Earnings per share: Income before cumulative effect of a change in accounting principle $ .14
Net income $ .24
On June 30, 1992, the company completed the acquisition of Universal Industries, Inc., a professional sports hatwear licensee located in Mattapoisett, Massachusetts, through an all-stock deal valued at $11.1 million for nearly 1.3 million common shares. The acquisition has been accounted for as a pooling of interests, and accordingly, the financial statements have been restated to include the results of operations for Universal for all periods presented.
(In thousands of dollars) Six months ended Year ended 				 June 1992 (Unaudited) Dec. 28,1991 				 --------------------- ------------ Net sales and other income: Tultex $138,588 $315,234 Universal 20,777 34,676 				 --------------------- ------------ Combined $159,365 $349,910 				 --------------------- ------------ Income before cumulative effect of a change in accounting principle: Tultex $ (5,331) $ 6,651 Universal 859 673 				 --------------------- ------------ Combined $ (4,472) $ 7,324 				 --------------------- ------------ Net income: Tultex $ (5,331) $ 9,499 Universal 859 673 				 --------------------- ------------ Combined $ (4,472) $ 10,172 			 ===================== ============
Note 3--Inventories
The components of inventories are as follows:
(In thousands Jan. 1, Jan. 2, Dec. 28, of dollars) 1994 1993 1991 				-------- -------- -------- Raw materials $ 29,291 $ 23,664 $ 5,074 Goods in process 11,956 13,641 12,494 Finished goods 112,296 88,549 68,243 Supplies 3,735 4,312 3,557 				-------- -------- -------- Total inventory $157,278 $130,166 $ 89,368 				======== ======== ========
During the fourth quarter of 1993, the company changed its method of determining the cost of inventories from the LIFO method to the FIFO method. Under the current economic environment of low inflation, the company believes that the FIFO method will result in a better measurement of operating results. This change has been applied by retroactively restating the accompanying consolidated financial statements. Although this change in method did not materially impact net income in 1993, it decreased net income by $4,001,000 or 14 cents per share in 1992, and $416,000 or 1 cent per share in 1991.
Note 4--Property, Plant and Equipment
Property, plant and equipment, at cost, consist of the following:
(In thousands of dollars) Jan. 1, 1994 Jan. 2, 1993 					------------ ------------ Land and improvements $ 3,821 $ 3,808 Buildings and improvements 68,204 65,254 Machinery and equipment 209,044 186,768 Construction in progress 2,863 8,399 					------------ ------------ 					 283,932 264,229 Less accumulated depreciation 132,157 111,041 					------------ ------------ Net property, plant and equipment $ 151,775 $ 153,188 					============ ============
Note 5--Short-Term Credit Agreements
Until October 6, 1993, when the company entered into a two-year revolving credit agreement with 12 banks (see Note 6), it had formal short-term lines of credit with lending banks aggregating $57,000,000 with interest payable at or below the prime rate. At January 2, 1993 and December 28, 1991, the weighted average interest rates on borrowings outstanding of $79,825,000 and $51,000,000 were 4.1% and 5.3% respectively. The use of these lines was restricted to the extent that the company was required to liquidate its indebtedness to certain individual banks for a 30-day period each year. At times, the company borrowed amounts in excess of the lines on a short-term negotiated basis.
The company currently has short-term lines of credit with two lending banks totaling $5,000,000. There were no borrowings outstanding under these lines at January 1, 1994.
As part of the borrowing arrangements, the company was expected to maintain average compensating cash balances, which were based on a percentage of the available credit line by bank and the percentages varied by bank. The amount of compensating balances required for credit lines in effect January 1, 1993 was an average of $1,320,000. The compensating balances were held under agreements which did not legally restrict the use of such funds, and therefore the funds were not segregated on the face of the balance sheet. The compensating cash balances were determined daily by the lending banks based upon balances shown by the bank, adjusted for average uncollected funds and Federal Reserve requirements. During the periods shown in the statements, the company was in substantial compliance with the compensating requirements. Funds on deposit with the lending banks and considered in the compensating balances were subject to withdrawal; however, the availability of the short-term lines of credit were dependent upon the maintenance of sufficient average compensating balances.
The Universal Industries subsidiary, accounted for as a pooling-of-interests acquisition, had outstanding under short-term banker's acceptance agreements $4,762,000 at December 31, 1991.
The company utilizes letters of credit for foreign sourcing of inventory. Letters of credit outstanding were $9,715,000, $5,266,000 and $771,000 at January 1, 1994, January 2, 1993 and December 28, 1991, respectively. After October 6, 1993, all letters of credit issued were part of the revolving credit agreement described in Note 6.
Note 6--Long-Term Debt
(In thousands of dollars) Jan. 1, 1994 Jan. 2, 1993 					------------ ------------ Amount due under revolving credit agreement $ 121,000 $ -- 8 7/8% senior notes due July 1, 1999 95,000 95,000 8.94% term loan due July 31, 1996 22,917 25,000 Other indebtedness 521 706 					------------ ------------ 					 239,438 120,706 Less current maturities 8,524 2,268 					------------ ------------ Total long-term debt $ 230,914 $ 118,438 					============ ============
On October 6, 1993, the company signed a two-year $225 million revolving credit agreement with 12 banks with interest at or below prime. The facility replaced the company's previous short-term credit lines used to support working capital and future growth. The agreement provides for a two-year maturity with three annual options to renew.
On June 26, 1992, the company issued 8.875% unsecured, senior notes totaling $95,000,000. Payments consist of interest only for the first two years and installment payments of principal and interest for the remaining five years. The proceeds of this financing retired an interim loan of $45,000,000 used to acquire Logo 7, prepaid $25,000,000 of the $50,000,000 term loan obtained in 1989 and refinanced other indebtedness.
Interest is due quarterly and principal is due in 11 remaining quarterly installments of $2,083,000 on the remaining $22,917,000 of the term loan. As a condition to the $25,000,000 prepayment in 1992, the company indemnified the term-loan lender for the costs and liabilities associated with an interest rate credit exchange agreement that allowed the lender to provide fixed-rate financing to the company at the inception of the term loan in 1989.
The term loan agreement, senior notes and revolving credit agreement contain provisions regarding maintenance of working capital and restrictions on payment of cash dividends. At January 1, 1994, the company was in compliance or had obtained waivers for any violations of covenants. Consolidated retained earnings, which were free of dividend restrictions, amounted to $2,744,000 at January 1, 1994.
Interest paid by the company (net of capitalized amounts) in 1993, 1992 and 1991 was $16,830,000, $13,180,000 and $10,706,000, respectively.
The approximate aggregate maturities of long-term debt for each of the next five fiscal years are as follows:
(In thousands of dollars) Total 									-------- 1994 $ 8,524 1995 148,541* 1996 25,373 1997 19,000 1998 19,000
*Includes maturity of $121,000,000 outstanding under revolving credit agreement which the company expects to renew.
Note 7--Dividends
At December 30, 1989, dividends payable represented amounts paid January 2, 1990 and April 2, 1990. The latter dividend was declared in December 1989 and was charged against stockholders' equity in that period. This dividend was for the first quarter 1990 and therefore not included in 1989 dividends per share information presented in this report. At January 1, 1994, dividends payable represents amounts paid on January 3, 1994.
Note 8--Stock Options In 1988, the company's stockholders ratified the 1987 Stock Option Plan under which 700,000 shares of common stock were reserved for stock option grants to certain officers and employees. The plan provided that options may be granted at prices not less than the fair market value on the date the option is granted, which means the closing price of a share of common stock as reported on the New York Stock Exchange composite tape on such day. Some options remain unexercised from the 1987 Stock Option Plan, which expired November 19, 1992.
On March 21, 1991, the company's stockholders ratified the 1990 Stock Option Plan under which 700,000 shares of common stock were reserved for stock option grants to certain officers and employees. Options granted under the 1990 Plan may be incentive stock options ("ISOs") or nonqualified stock options. The option price will be fixed by the Executive Compensation Committee of the Board at the time the option is granted, but in the case of an ISO, the price cannot be less than the share's fair market value on the date of grant. Grants must be made before October 18, 2000 and expire within 10 years of the date of grant. In exercising options, an employee may receive a loan from the company for up to 90% of the exercise price. Outstanding loans are shown as a reduction of stockholders' equity on the balance sheet.On October 28, 1993, the Board of Directors approved an increase of 500,000 shares in the maximum number of shares to be issued pursuant to the exercise of options granted under the Plan, extended the date that grants could be made to October 27, 2003, and provided that no participant may be granted options in any calendar year for more than 50,000 shares of Common Stock. Shareholders will be asked to approve these change at the Annual Meeting.
A summary of the changes in the number of common shares under option for each of the three previous years follows:
Year ended January 1, 1994 Number of Shares Per Share Option Price 				 ---------------- ---------------------- Outstanding at beginning of year 1,015,833 $7.50-$9.63 Granted 280,000 $6.88-$9.75 Exercised 175,600 $7.63-$9.63 Expired 165,000 $7.88 Canceled 27,000 $7.63-$9.63 			 --------------- ---------------------- Outstanding at end of year 928,233 $6.88-$9.75 				 =============== ====================== Exercisable at end of year 748,233 $6.88-$9.75 				 =============== ====================== Shares reserved for future grant: Beginning of year 307,400 				 =============== End of year 39,900 				 ===============
Year ended January 2, 1993 Number of Shares Per Share Option Price 			 ---------------- ---------------------- Outstanding at beginning of year 545,196 $7.50-$11.92 Granted 536,600 $8.38-$ 9.63 Exercised 14,734 $7.63-$ 9.63 Expired 26,463 $11.92 Canceled 24,766 $7.63-$ 9.63 				 ---------------- ---------------------- Outstanding at end of year 1,015,833 $7.50-$ 9.63 				 ================ ====================== Exercisable at end of year 945,833 $7.50-$ 9.63 				 ================ ====================== Shares reserved for future grant: Beginning of year 836,350 				 ================ End of year 307,400 				 ================
Year ended December 28, 1991 Number of Shares Per Share Option Price 			 ---------------- ---------------------- Outstanding at beginning of year 861,483 $7.50-$12.67 Granted 30,000 $8.25-$ 8.38 Exercised 2,550 $7.63 Expired 172,446 $12.67 Canceled 171,291 $7.63-$12.67 				 ---------------- ---------------------- Outstanding at end of year 545,196 $7.50-$11.92 				 ---------------- ---------------------- Exercisable at end of year 515,196 $7.50-$11.92 			 ================ ====================== Shares reserved for future grant: Beginning of year 47,500 				 ================ End of year 836,350 				 ================
Note 9--Provision for Income Taxes
The components of the provision for federal and state income taxes are summarized as follows: 		 				Jan. 1, Jan. 2, Dec. 28, (In thousands of dollars) 1994 1993 1991 				------- ------- -------- Currently payable: Federal $ 1,192 $ 6,694 $ (459) State 116 600 87 				------- ------- -------- 				 1,308 7,924 (372) 				------- ------- -------- Deferred: Federal 1,723 (214) 3,275 State 157 (20) 540 				------- ------- -------- 				 1,880 (234) 3,815 				------- ------- -------- Total Provision $ 3,188 $ 7,060 $ 3,443 				======= ======= ========
Deferred income taxes resulted from the following temporary differences:
				Jan. 1, Jan. 2, Dec. 28, (In thousands of dollars) 1994 1993 1991 				------- ------- -------- Depreciation $ 2,095 $ 2,864 $ 2,346 Inventory (24) (3,110) (188) Pension (486) (83) 373 Debt repayment penalty -- -- 415 Abandonment loss 187 -- 845 Goodwill 283 -- -- Postretirement benefits (172) -- -- Other (3) 95 24 				 ------- ------- -------- Total $ 1,880 $ (234) $ 3,815 				======= ======= ========
Significant components of the deferred tax liabilities and assets are as follows:
(In thousands of dollars) Jan. 1, 1994 Jan. 2, 1993 				------------ ------------ Deferred tax liabilities: Tax over book depreciation $ 15,990 $ 13,842 Spare parts inventory 797 788 Other 665 425 				------------ ------------ Gross deferred tax liabilities 17,452 15,055 			------------ ------------ Deferred tax assets: Bad debt reserves 766 765 Inventory reserves 1,211 1,186 Postretirement benefits 176 -- Pension obligations 962 462 Workmen's compensation 182 181 Abandonment loss -- 193 Other 141 134 Gross deferred tax assets 3,438 2,921 			------------ ------------ Net deferred tax liabilities $ 14,014 $ 12,134 				============ ============
A reconciliation of the statutory federal income tax rates with the company's effective income tax rates for 1993, 1992 and 1991 was as follows:
				 Jan. 1, Jan. 2, Dec. 28, 				 1994 1993 1991 				 ------- ------- --------
Statutory federal rate 34% 34% 34% State rate, net 2 2 3 Goodwill -- -- (3) Untaxed foreign income -- (1) (2) Other (1) -- -- 				 ------- ------- -------- Effective income tax rate 35% 35% 32% 				 ======= ======= ========
Income tax payments were $4,512,000, $4,404,000 and $2,705,000 for 1993, 1992 and 1991, respectively.
In 1992, the company adopted the provisions of the Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes." This Statement, issued in February 1992, superseded SFAS No. 96, "Accounting for Income Taxes," which the company had adopted in 1991. Both statements require the liability method in accounting for deferred income taxes. The company's adoption of SFAS No. 109 resulted in no material effect on 1992 earnings. The cumulative effect of the change in accounting principle due to the adoption of SFAS No. 96 at the beginning of the 1991 fiscal year was $2,848,000, or 10 cents per share, and is separately shown in the 1991 statement of income.
Note 10--Employee Benefits
All qualified employees of the parent company and its Universal subsidiary are covered by a noncontributory, defined benefit plan. The benefits are based on years of service and the employee's highest 5 consecutive calendar years of compensation paid during the 10 most recent years before retirement. Prior service costs are amortized over 30 years. The status of the defined benefit plan as of January 1, 1994 and January 2, 1993 was as follows:
(In thousands of dollars) 1993 1992 					 ------- ------- Fair value of plan assets, primarily listed stock and corporate and government debt $40,261 $40,006 					 ------- ------- Accumulated benefit obligation, including vested benefits of $29,294 and $27,149, respectively 30,114 27,977 Additional benefits based on estimated future salary levels 6,851 9,592 									 ------- ------- Projected benefit obligation 36,965 37,569 									 ------- ------- Plan assets in excess of projected benefit obligation 3,296 2,437 Unrecognized net gain (2,910) (1,253) Unrecognized net transitional assets (2,308) (2,777) Unrecognized prior service cost 257 293 									 ------- ------- Accrued pension liability $(1,665) $(1,300) 									 ======= =======
The following rate assumptions were made for the noncontributory, defined benefit and the nonqualified unfunded supplementary retirement plans:
					1993 1992 					----- ---- Discount rate of return on projected benefit obligation 8.0% 9.0% Rate of return on plan assets 10.0% 9.0%
The long-term rate of salary progression for 1993 reflected no anticipated rate increase for the first two years, followed by 3.5% for two years, 4% for six years and 5% thereafter. The comparable rate in 1992 was 5% for all years. The changes in rates from year to year were made to reflect what management considered to be a better approximation of the rates to be realized.
Pension expense in 1993 and 1992 included the following components:
(In thousands of dollars) 1993 1992 						 ------- ------- Service cost-benefits earned during the period $ 1,861 $ 1,697 Interest on projected benefit obligation 2,893 3,176 Actual gain on plan assets (2,362) (2,400) Net deferral (1,919) (1,370) Curtailment loss -- 104 Settlement gain -- (151) 										 ------- ------- Net periodic pension cost $ 473 $ 1,056 											 ======= =======
The company's policy has been to fund the minimum required contribution after the end of the fiscal year plus interest on the contribution from the end of the plan year until paid. The company's Universal Industries subsidiary historically funded the maximum required contribution during the year.
At the end of 1992, Universal Industries, Inc. pension plan's future service benefits were frozen and the plan assets were absorbed into the company's pension plan, which resulted in a curtailment loss of $104,000.
The company has a nonqualified, unfunded supplementary retirement plan for which it has purchased cost recovery life insurance on the lives of the participants. The company is the sole owner and beneficiary of such policies. The amount of coverage is designed to provide sufficient revenues to recover all costs of the plan if assumptions made as to mortality experience, policy earnings and other factors are realized. Expenses related to the plan were $547,000 in 1993, $395,000 in 1992 and $312,000 in 1991. The actuarially determined liability which has been included in other deferrals was $3,190,000 at January 1, 1994, $2,313,000 at January 2, 1993 and $1,962,000 at December 28, 1991.
The following table sets forth the plan's status and amounts recognized in the company's financial statements at January 1, 1994 and January 2, 1993:
(In thousands of dollars) 1993 1992 										------- ------- Fair value of plan assets $ -- $ -- 										------- ------- Accumulated benefit obligation, including vested benefits of $3,043 and $2,284, respectively 3,190 2,313 Additional benefits based on estimated future salary levels (5) 1,341 											------- ------- Projected benefit obligation 3,185 3,654 											------- ------- Projected benefit obligation in excess of plan assets (3,185) (3,654) Unrecognized net loss 667 1,213 Unrecognized transitional obligation 1,092 1,193 Adjustment required to recognize minimum liability (1,764) 1,065) 											------- ------- Unfunded accrued supplementary costs $(3,190) $(2,313) 											======= =======
Net supplementary pension cost for the two years included the following components:
(In thousands of dollars) 1993 1992 											------ ------ Service cost-benefits earning during the period $ 110 $ 95 Interest on projected benefit obligation 276 200 Net amortization 161 100 											------ ------ Net periodic supplementary pension cost $ 547 $ 395 											====== ======
Substantially all employees meeting certain service requirements are eligible to participate in the company's employee savings (401-K) plan. Employee contributions are limited to a percentage of their compensation, as defined in the plan. Although the plan did not provide for any company contributions in 1992, a matching provision became effective April 1993, but was discontinued on January 2, 1994.
A new profit sharing plan was implemented January 1, 1991 which provides for a quarterly payment to employees if a profit is reported in the most recently completed quarter and is sufficient to recover any previously reported quarterly losses. This replaced the employee bonus plan that was in effect in the previous years. The employee profit sharing/bonus expense was $727,000 in 1993, $4,614,000 in 1992 and $2,446,000 in 1991.
The company also provides certain postretirement medical and life insurance benefits to substantially all employees who retire with a minimum of 15 years of service for the period of time until the employee and any dependents reach age 65. The medical plan requires monthly contributions by retired participants which are dependent on the participant's length of service, age at the date of retirement and Medicare eligibility. The life insurance plan is noncontributory. Prior to 1993, the company expensed the costs relating to these unfunded plans as incurred. Such costs amounted to approximately $375,000 in 1992 and 1991.
In 1993, the company adopted Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions." The standard required companies to recognize the estimated costs of provided postretirement benefits on an accrual basis. The company elected the delayed recognition method of adoption which allows amortization of the initial transitional obligation over a 20-year period. At January 3, 1993, the actuarially determined accumulated postretirement benefit was $5,101,000.
The amounts recognized on the company's balance sheet at January 1, 1994 were as follows:
(In thousands of dollars) 1993 											------- Accumulated postretirement benefit obligation $ 5,323 Unrecognized transitional obligation (4,846) 											------- Accrued liability $ 477 											=======
Net periodic postretirement benefit cost for 1993 included the following components:
(In thousands of dollars) 1993 						------ Service cost-benefits earned during the period $ 171 Interest on accumulated postretirement benefit obligation 402 Amortization of accumulated postretirement benefit obligation 256 											------ Total $ 829 										======
The discount rate used in determining the accumulated postretirement benefit obligation was 8%. The assumed medical cost trend rate was 12% in 1993, declining by 1% per year until an ultimate rate of 5% is achieved. The medical cost trend rate assumption has a significant effect on the amount of the obligation and net periodic cost reported. A one percentage point increase in the medical cost trend rate would have increased the accumulated postretirement benefit obligation by $337,000 and the aggregate service and interest cost components of the net periodic postretirement benefit cost for 1993 by $52,000.
In November 1992, the Financial Accounting Standards Board released Statement No. 112 "Employers' Accounting for Postemployment Benefits." As the company does not have significant postemployment benefits, the adoption of this statement in 1994 is not expected to have a material impact on the company's results of operations or financial position.
Note 11--Quarterly Financial Information (Unaudited) The following is a summary of the unaudited quarterly financial information for the years ended January 1, 1994 and January 2, 1993.*
(In thousands of dollars except per share data) 1993 1992 											-------- -------- Net Sales and Other Income 1st quarter $ 91,022 $ 70,762 2nd quarter 100,238 88,603 3rd quarter 187,109 181,129 4th quarter 155,242 163,452 											-------- -------- Total $533,611 $503,946 										======== ======== Gross Profit 1st quarter $ 21,957 $ 14,823 2nd quarter 23,386 17,805 3rd quarter 38,742 37,813 4th quarter 31,985 45,820 											-------- -------- Total $116,070 $116,261 											======== ========
											1993 1992 											-------- -------- Income Before Income Taxes 1st quarter $ (2,295) (4,849) 2nd quarter 681 (2,816) 3rd quarter 7,437 7,729 4th quarter 3,268 20,187 											-------- -------- Total $ 9,091 $ 20,251 											======== ======== Provision for Income Taxes 1st quarter $ (852) $ (1,791) 2nd quarter 246 (1,402) 3rd quarter 2,767 3,086 4th quarter 1,027 7,167 											-------- -------- Total $ 3,188 $ 7,060 											======== ========
Net Income 1st quarter $ (1,443) $ (3,058) 2nd quarter 435 (1,414) 3rd quarter 4,670 4,643 4th quarter 2,241 13,020 											-------- -------- Total $ 5,903 $ 13,191 											======== ========
Net Income per Common Share 1st quarter $ (.06) $ (.11) 2nd quarter .01 (.06) 3rd quarter .15 .15 4th quarter .06 .44 											-------- -------- Total $ .16 $ .42 											======== ========
*The first two quarters of 1992 have been restated to reflect the acquisition of Universal Industries, Inc. treated as a pooling of interests. In addition, all quarters have been restated to reflect a change in accounting method from LIFO to FIFO.
Note 12--Lease Commitments At January 1, 1994, the company was obligated under a number of noncancelable, renewable operating leases as follows:
						 							Data Manufacturing 							Processing Facilities and (In thousands of dollars) Equipment Other Total 					---------- -------------- ------- 1994 $ 3,064 $ 5,316 $ 8,380 1995 2,568 4,582 7,150 1996 1,905 3,578 5,483 1997 1,450 2,701 4,151 1998 1,051 2,124 3,175 1999 and after -- 14,771 14,771 				---------- ------------- ------- 							$ 10,038 $ 33,072 $43,110 							========== ============= =======
Rental expense charged to income was $15,092,000 in 1993, $13,696,000 in 1992 and $12,309,000 in 1991.
Note 13--Employment Agreements The company has entered into employment continuity agreements with certain of its executives which provide for the payments to these executives of amounts up to three times their annual compensation plus continuation of certain benefits if there is a change in control of the company (as defined) and a termination of their employment. The maximum contingent liability at January 1, 1994 under these agreements was approximately $4,560,000.
Employment agreements with certain executives were executed as a result of the Logo 7 acquisition. Under predefined events of termination, the company could incur a maximum liability of $9,786,000 as of January 1, 1994.
Note 14--Concentration of Credit Risk The company's concentration of credit risk is limited due to the large number of primarily domestic customers who are geographically dispersed. The company has no customer that constituted 10% of net sales in 1993. As disclosed on the balance sheet, the company maintains an allowance for doubtful accounts to cover estimated credit losses.
Note 15--Shareholder Rights Plan In March 1990, the Board of Directors of the company adopted a Shareholder Rights Plan and declared a dividend of one right for each outstanding share of common stock to shareholders of record April 2, 1990. Each right entitles the registered holder to purchase from the company, until the earlier of March 22, 2000 or the redemption of the rights, one one-thousandth of a share of newly authorized Junior Participating Cumulative Preferred Stock, Series A, without par value, at an exercise price of $40. The rights are not exercisable or transferable apart from the common stock until the earlier of (i) 10 days following the public announcement that a person or a group of affiliated persons has acquired or obtained the right to acquire beneficial ownership of 10% or more of the company's outstanding common stock or (ii) 10 business days following the commencement of a tender offer or exchange offer that would result in a person or group owning 10% or more of the company's outstanding common stock. The company may redeem the rights at a price of $.01 per right at any time prior to the acquisition of 10% or more of the company's outstanding common stock or certain other triggering events.
Note 16--Stock Purchase Plan In February 1994, the company initiated the Salaried Employees' Stock Purchase Plan. Under the plan, employees may elect to purchase shares of the company's common stock in amounts ranging from 20-30% of their annual salary. Employees will pay for the stock through payroll deductions over a 60-month period. The shares will be held by the company and interest of 6% per annum will be charged until the end of the 60-month period. The price of the shares will be fixed as of the last day of trading in February 1994. The company has reserved 925,000 shares of common stock for issuance pursuant to the plan.
Report of Independent Accountants
To the Stockholders and Board of Directors of Tultex Corporation
In our opinion, based upon our audits and the report of other auditors, the accompanying consolidated balance sheet and the related consolidated statements of income, of cash flows and of changes in stockholders' equity present fairly, in all material respects, the financial position of Tultex Corporation and its subsidiaries (the company) at January 1, 1994 and January 2, 1993, and the results of their operations and their cash flows for each of the three years in the period ended January 1, 1994, in conformity with generally accepted accounting principles. 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 did not audit the financial statements of Universal Industries, Inc., a wholly-owned subsidiary, which statements reflect total revenues of $34,984,000 for the year ended December 31, 1991. Those statements were audited by other auditors whose report thereon has been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included for Universal Industries, Inc., is based solely on the report of other auditors. We conducted our audits of these statements in accordance with generally accepted auditing standards which 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 significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits and the report of other auditors provide a reasonable basis for the opinion expressed above.
As discussed in Note 9 of Notes to Financial Statements, the company changed its method of accounting for income taxes in 1992 and 1991. In addition, as discussed in Notes 3 and 10 of Notes to the Financial Statements, the company changed its method of valuing inventory and accounting for postretirement medical and life insurance benefits, respectively, in 1993.
Price Waterhouse
Winston-Salem, North Carolina
February 23, 1994
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant.
With respect to the directors of the company, the information required by Item 10 of Form 10-K appears on pages 3 through 5 of the company's 1994 Proxy Statement and is incorporated herein by reference.
With respect to the executive officers of the company, the information required by Item 10 of Form 10-K appears in Part I of this report.
Item 11.
Item 11. Executive Compensation.
The information required by Item 11 of Form 10-K appears on pages 6 (beginning with "Executive Compensation") through 9 of the company's 1994 Proxy Statement and is incorporated herein by reference.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information required by Item 12 of Form 10-K appears on page 1 and 2 of the company's 1994 Proxy Statement and is incorporated herein by reference.
Item 13.
Item 13. Certain Relationships and Related Transactions.
The information required by Item 13 of Form 10-K appears on page 11 of the company's 1994 Proxy Statement and is incorporated herein by reference.
PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(1) Financial Statements:
	 The financial statements filed as part of this report are listed 	 on the Index to Consolidated Statements on page 12.
(2) Financial Statement Schedules: Page in Form 10-K
	 Report of Independent Accountants on 	 Financial Statement Schedules:
	 Price Waterhouse (a)
	 Coopers & Lybrand (b and c)
	 Consolidated Financial Statement 	 Schedules for each of the three years 	 in the period ended January 1, 1994:
	 V - Property, Plant and Equipment
	 	 VI - Accumulated Depreciation of 		Property, Plant and Equipment
	 VIII - Valuation and Qualifying Accounts 		 and Reserves
	 IX - Short-Term Borrowings
	 X - Supplementary Income Statement 	 Information
All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
(3) Exhibits 	 	 3.1 Restated Articles of Incorporation (filed as Exhibit 3.1 to the 		Company's Form 10-K for the year ended December 29, 1990 and 		incorporated herein by reference)
	 3.2 Articles of Amendment to the Restated Articles of Incorporation 		(filed as Exhibit 3 to the Company's 8-K dated January 31, 1992 		and incorporated herein by reference)
	 3.3 By-Laws (filed as Exhibit 3.3 to the Company's Form 10-K for 		the year ended January 2, 1993 and incorporated herein by 		reference)
	 4.1 Note Agreement dated as of June 1, 1992 (filed as exhibit to 		the Company's Form 10-Q for the quarter ended June 27, 1992 and 		incorporated herein by reference)
	 4.2 Rights Agreement originally dated March 22, 1990 between the 		Company and Sovran Bank, N.A. (subsequently assigned to 		Wachovia Bank of North Carolina, N.A.), as Rights Agent 		(incorporated herein by reference to Exhibit 4.1 of the 		Company's Current Report on Form 8-K March 22, 1990)
	 10.1 Tultex Corporation 1987 Stock Option Plan (filed as Exhibit B 		to the company's Definitive Proxy Statement dated and mailed 		January 15, 1988 and incorporated herein by reference) *
	 10.2 Tultex Corporation 1990 Stock Option Plan (filed as Exhibit A 		to the company's Definitive Proxy Statement dated and mailed 		February 14, 1991 and incorporated herein by reference) *
	 10.3 Resolution of the Board of Directors of Tultex Corporation as 		to the establishment of a bonus fund (filed as an Exhibit to 		the company's Form 10-K for fiscal year ended November 28, 1986 		and incorporated herein by reference) *
	 10.4 Supplemental Retirement Plan (filed as an exhibit to the 		company's Form 10-K dated March 7, 1990 and incorporated 		herein by reference) *
	 10.5 Tultex Corporation Employee Savings Plan (filed as an exhibit 		to the company's Form 10-K for the fiscal year ended November 		27, 1987 and incorporated herein by reference) *
	 10.6 Form of Employment Continuity Agreement (filed as exhibits to 		the company's Form 10-Q for the quarter ended April 1, 1989 		and the company's Form 10-Q for the quarter ended March 31, 		1990 and incorporated herein by reference) * 	 	 10.7 Stock Purchase Agreement (filed as an exhibit to the Company's 	 	Form S-1 dated September 29, 1992 and incorporated herein by 	reference)
	 10.8 Asset Purchase Agreement, dated as of November 16, 1991, among 		the Tultex Corporation, Logo 7, Inc. (Ind.), and Herbert and 		Melvin Simon, as amended on January 31, 1992 (filed as Exhibit 		10(a) to the company's Form 8-K dated January 31, 1992 and 		incorporated herein by reference)
	 10.9 Standstill Agreement, dated as of January 31, 1992, among 		Tultex Corporation, Logo 7, Inc. (Ind.), Melvin Simon and 		Herbert Simon (filed as Exhibit 10(b) to the company's Form 8-K 		dated January 31, 1992 and incorporated herein by reference)
	 10.10 Term Loan Agreement, dated September 11, 1989 among Tultex 		 Corporation, Tulstar Factors, Inc. and Wachovia Bank and 		 Trust Company (filed as Exhibit 10.9 to the Company's Form 		 S-1 dated September 29, 1992 and incorporated herein by 		 reference)
	 10.11 First Amendment to Term Loan Agreement, dated January 30, 		 1992, among Tultex Corporation and Wachovia Bank of North 		 Carolina, N.A. (filed as Exhibit 10(f) to the Company's Form 		 8-K dated January 31, 1992 and incorporated herein by reference)
	 10.12 Second Amendment to Term Loan Agreement, dated April 23, 		 1992, among Tultex Corporation, Tulstar Factors, Inc. and 	 Wachovia Bank of North Carolina, N.A. (filed as Exhibit 		 10.11 to the Company's Form S-1 dated September 29, 1992 		 and incorporated herein by reference)
	 10.13 Third Amendment to Term Loan Agreement, dated October 2, 		 1992, among Tultex Corporation, Tulstar Factors, Inc. and 		 Wachovia Bank of North Carolina, N.A.
	 10.14 Fourth Amendment to Term Loan Agreement, dated November 30, 		 1992, among Tultex Corporation, Tulstar Factors, Inc. and 		 Wachovia Bank of North Carolina, N.A.
	 10.15 Fifth Amendment to Term Loan Agreement, dated as of July 4, 		 1993, among Tultex Corporation, Tulstar Factors, Inc. and 		 Wachovia Bank of North Carolina, N. A. (files as Exhibit 		 10.16 to the Company's Form 10-Q for the quarter ended 		 October 2, 1993 and incorporated herein by reference)
	 10.16 Amendment No. 1 to Note Agreement, dated September 1, 1993, 		 among Tultex Corporation and certain institutional investors 		 (filed as Exhibit 10.17 to the Company's Form 10-Q for the 		 quarter ended October 2, 1993 and incorporated herein by 		 reference)
	 10.17 Credit Agreement, dated as of October 6, 1993, for $225 		 million credit facility (filed as Exhibit 10.18 to the 		 Company's Form 10-Q for the quarter ended October 2, 1993 		 and incorporated herein by reference)
	 10.18 Tultex Corporation Salaried Employees' Common Stock Purchase 		 Plan, dated February 11, 1994 (filed as Exhibit 4.5 to the 		 Company's Form S-8 dated February 11, 1994 and incorporated 		 herein by reference)
	 11 The computation of earnings per share can be clearly determined 		 from the financial statements of the Company contained in the Annual 		 Report to Stockholders
18 Preferability letter of Price Waterhouse
	 21 Subsidiaries of the company (filed herewith)
	 23.1 Consent of Price Waterhouse (filed herewith)
	 23.2 Consent of Coopers & Lybrand (filed herewith)
	 	 * Management contract or compensatory plan arrangement
	 (b) Reports of Form 8-K
	 No reports on Form 8-K were filed for the quarter ended 	 January 1, 1994.
REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHECULES
To the Board of Directors of Tultex Corporation
Our audits of the consolidated financial statements referred to in our report dated February 23, 1994 appearing on Page 28 of the 1993 Annual Report to Stockholders of Tultex Corporation, (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K), also included an audit of the Financial Statement Schedules listed in the accompanying index of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated finanical statements.
/s/ Price Waterhouse - - -------------------- PRICE WATERHOUSE
Winston-Salem, North Carolina February 23, 1994
(a)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Universal Industries, Inc.:
We have audited the consolidated balance sheets of Universal Industries, Inc. as of December 31, 1991 and the related consolidated statements of income and retained earnings and cash flows and for the two year period ended December 31, 1991 (not presented separately herein). 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 finanical statements referred to above present fairly, in all material respects, the finanical position of Universal Industries Inc. as of December 31, 1991, and the results of its operations and its cash flows for each of the two year period ended December 31, 1991 in conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand - - --------------------- COOPERS & LYBRAND
Boston, Massachusetts March 19, 1992
(b)
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of Universal Industries Inc.:
In connection with our audits of the consolidated financial statements of Universal Industries, Inc. as of December 31, 1991 and for the two year period ended December 31, 1991, (not presented separately herein), we have also audited the following financial statement schedules:
Schedule V - Property, Plant and Equipment Schedule VI - Accumulated Depreciation of Property, Plant and Equipment Schedule VIII - Valuation and Qualifying Accounts Schedule IX - Short-term Borrowings Schedule X - Supplementary Income Statement Information
In our opinion, these financial statement schedules, when considered in relation to the basic finanical statements taken as a whole, present fairly, in all material respects, the information required to be included therein.
/s/ Coopers & Lybrand - - --------------------- COOPERS & LYBRAND
Boston, Massachusetts March 19, 1992
(c)
TULTEX CORPORATION SCHEDULE V PROPERTY, PLANT AND EQUIPMENT CONSOLIDATED
(In thousands of dollars) 										 Sales 					 Balance at and Balance 					 beginning Additions retire- at end 					 of period at cost ments Other of period 					 --------- --------- ------- ----- --------- For the fifty-two weeks ended December 28, 1991
Land & improvements $ 3,266 $ 706 $ 117 $ 0 $ 3,855 Buildings & improvements 32,749 26,763 3,727 0 55,785 Machinery & equipment 112,510 60,562 14,854 (2) 158,216 Furniture & fixtures 8,654 653 292 2 9,017 Transportation equipment 170 7 48 0 129 Construction in progress 80,845 (74,331)(a) 0 0 6,514 			 -------- ------- ------- ------ -------- 				 $238,194 $14,360 $19,038 $ 0 $233,516
											 Sales 					 Balance at and Balance 					 beginning Additions retire- at end 					 of period at cost ments Other of period 				 --------- --------- ------- ----- --------- For the fifty-three weeks ended January 2, 1993
Land & improvements $ 3,855 $ 5 $ 52 $ 0 $ 3,808 Buildings & improvements 55,785 4,019 0 5,450 65,254 Machinery & equipment 158,216 25,781(b) 3,000 (5,450) 175,547 Furniture & fixtures 9,017 2,048 10 0 11,055 Transportation equipment 129 37 0 0 166 Construction in progress 6,514 1,885 0 0 8,399 			 -------- ------- ------- ------ -------- 					 $233,516 $33,775 $ 3,062 $ 0 $264,229
For the fifty-two weeks ended January 1, 1994
Land & improvements $ 3,808 $ 13 $ 0 $ 0 $ 3,821 Buildings & improvements 65,254 2,950 0 0 68,204 Machinery & equipment 175,547 22,919 2,455 2 196,013 Furniture & fixtures 11,055 1,857 92 (2) 12,818 Transportation equipment 166 47 0 0 213 Construction in progress 8,399 (5,536) 0 0 2,863 			 -------- ------- ------- ------ -------- 					 $264,229 $22,250 $ 2,547 $ 0 $283,932
							
							
(a) These additions primarily relate to construction of the Customer Service Center.
(b) Includes fixed assets acquired from Logo 7 of $3,445,000.
TULTEX CORPORATION SCHEDULE VI ACCUMULATED DEPRECIATION OF PROPERTY, CONSOLIDATED PLANT AND EQUIPMENT
											 Sales 					 Balance at and Balance (In thousands beginning Additions retire- at end of dollars) of period at cost ments Other of period --------- --------- ------- ----- --------- For the fifty-two weeks ended December 28, 1991
Land & improvements $ 163 $ 52 $ 1 $ 0 $ 214 Buildings & improvements 13,673 1,891 1,563 0 14,001 Machinery & equipment 67,091 14,480 10,217 (2) 71,352 Furniture & fixtures 6,759 922 273 2 7,410 Transportation equipment 136 24 47 0 113 			 --------- -------- ------- ----- -------- 					$ 87,822 $ 17,369 $12,101 $ 0 $ 93,090
For the fifty-three weeks ended January 2, 1993
Land & improvements $ 214 $ 69 $ 0 $ 0 $ 283 Buildings & improvements 14,001 2,651 0 141 16,793 Machinery & equipment 71,352 17,269 2,871 (141) 85,609 Furniture & fixtures 7,410 826 9 0 8,227 Transportation equipment 113 16 0 0 129 			 --------- -------- ------- ----- -------- 					$ 93,090 $ 20,831 $ 2,880 $ 0 $111,041
For the fifty-two weeks ended January 1, 1994
Land & improvements $ 283 $ 69 $ 0 $ 0 $ 352 Buildings & improvements 16,793 2,799 0 0 19,592 Machinery & equipment 85,609 19,398 2,157 2 102,852 Furniture & fixtures 8,227 1,073 91 (2) 9,207 Transportation equipment 129 25 0 0 154 			 --------- -------- ------- ------ -------- 					$ 111,041 $ 23,364 $ 2,248 $ 0 $132,157
									
TULTEX CORPORATION SCHEDULE VIII VALUATION AND QUALIFYING ACCOUNTS CONSOLIDATED AND RESERVES
(In thousands of dollars)
					 Balance at Additions Reserve for doubtful beginning charged to Balance at Accounts and returns of period operations Reductions end of period 				 --------- ---------- ---------- ------------- For the fifty-two weeks ended December 28, 1991 					 $ 2,432 $ 3,337 $(4,047)(1) $ 1,722
For the fifty-three weeks ended January 2, 1993
					 $ 1,722 $ 4,703 $(4,065)(1) $ 2,360
For the fifty-two weeks ended January 1, 1994
					 $ 2,360 $ 3,241 $(3,227)(1) $ 2,374
							
								
(1) Amounts represent write-off of uncollectible receivable balances.
TULTEX CORPORATION SCHEDULE IX SHORT-TERM BORROWINGS CONSOLIDATED
(In thousands of dollars)
									 Maximum Average Weighted Category of Balance Weighted amount amount average aggregate at end average outstanding outstanding interest rate short-term of interest during the during the during the borrowings period rate period period (1) period (2) 					------- -------- ----------- ----------- ------------- For the fifty-two weeks ended December 28, 1991
Short-term borrowings $55,762 5.4% $112,237 $72,667 6.5%
For the fifty-three weeks ended January 2, 1993
Short-term borrowings $79,825 4.1% $113,578 $81,042 4.4%
For the fifty-two weeks ended January 1, 1994 (3)
Short-term borrowings $ 0 0.0% $186,075 $92,128 3.7%
									
(1) Average short-term borrowings outstanding during the period are computed by averaging the daily short-term borrowings outstanding for the period.
(2) The weighted average interest rate for the period is computed by annualizing the short-term interest charged during the period and dividing by the weighted average short-term loans outstanding.
(3) On October 6, 1993, the company signed a two-year $225 million revolving credit agreement which replaced its short-term credit lines.
TULTEX CORPORATION SCHEDULE X SUPPLEMENTARY INCOME STATEMENT INFORMATION CONSOLIDATED
					 52 weeks 53 weeks 52 weeks 					 ended ended ended (In thousands December 28, January 2, January 1, of dollars) 1991 1993 1994 					 ------------ ---------- ---------- The following amounts were charged to costs and expenses
Maintenance and repairs $ 6,947 $ 7,731 $ 7,116
Advertising costs $ 4,176 (1) $ 6,840 $ 7,666
Royalty expenses $ 2,689 (1) $15,016 $19,795
				
					
Other amounts do not exceed one percent of total sales and revenues as reported in the consolidated statements of income.
(1) Did not exceed one percent of total sales and revenues as reported in the consolidated statements of income for these periods.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
					Tultex Corporation 					(Registrant)
					/s/ John M. Franck 					----------------------------------- 					By: John M. Franck, Chairman & CEO 					Date: April 16, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
April 16, 1994 /s/ John M. Franck 									-------------------------------------- 									John M. Franck, Chairman, CEO & 									Director (Principal Executive Officer)
April 16, 1994 /s/ Charles W. Davies, Jr. 									---------------------------------- 									Charles W. Davies, Jr., President, 									COO & Director
April 16, 1994 /s/ Don P. Shook 									------------------------------ 									Don P. Shook, Vice President - 									Human & Financial Services 									(Principal Financial Officer)
April 16, 1994 /s/ Suzanne H. Wood 									------------------------------ 									Suzanne H. Wood, Controller 									(Principal Accounting Officer)
April 16, 1994 /s/ William F. Franck 									--------------------------- 									William F. Franck, Director
April 16, 1994 /s/ H. R. Hunnicutt, Jr. 									---------------------------------- 									Harold R. Hunnicutt, Jr., Director
April 16, 1994 /s/ Lathan M. Ewers 									------------------------------ 									Lathan M. Ewers, Jr., Director
April 16, 1994 /s/ Irving M. Groves, Jr. 									------------------------------- 									Irving M. Groves, Jr., Director
April 16, 1994 /s/ Bruce M. Jacobson 								--------------------------- 									Bruce M. Jacobson, Director
April 16, 1994 /s/ J. Burness Frith 									-------------------------- 									J. Burness Frith, Director
April 16, 1994 /s/ Richard M. Simmons 									--------------------------------- 									Richard M. Simmons, Jr., Director
April 16, 1994 /s/ John M. Tully 									----------------------- 									John M. Tully, Director
							EXHIBITS
				 ANNUAL REPORT ON FORM 10-K
	 PURSUANT TO SECTION 13 OR 15(d) OF
		 THE SECURITIES EXCHANGE ACT OF 1934 	 		 FOR THE FISCAL YEAR ENDED JANUARY 1, 1994
		TULTEX CORPORATION
				COMMISSION FILE NUMBER 1-8016
Exhibit Index
	 18 Preferability letter of Price Waterhouse 	 	 21 Subsidiaries of the Company
	 23.1 Consent of Price Waterhouse
	 23.2 Consent of Coopers & Lybrand
Exhibit 18
February 23, 1994
To the Board of Directors of Tultex Corporation
Dear Directors:
We have audited the consolidated financial statements included in the Corporation's Annual Report on Form 10-K for the year ended January 1, 1994 and issued our report theron dated February 23, 1994. Note 3 to the consolidated financial statements describes a change in the Corporation's method of determining the cost of inventories from the last-in, first-out to the first-in, first-out method. It should be understood that the preferability of one acceptable method of inventory accounting over another has not been addressed in any authoritative accounting literature and in arriving at our opinion expressed below, we have relied on management's business planning and judgment. Based on our discussions with management and the stated reasons for the change, we believe that such change represents, in your circumstances, the adoption of a preferable alternative accounting principle for inventories in conformity with Accounting Principles Board Opinion No. 20.
Yours very truly,
/s/ Price Waterhouse - - -------------------- PRICE WATERHOUSE
Exhibit 21
			Subsidiaries of the Registrant
During fiscal 1993, the company had the following subsidiaries, all of which are included in the consolidated financial statements incorporated in this report:
	 AKOM, Ltd., a Cayman Islands, B.W.I. corporation (100% owned)
	 Tulstar Factors, Inc., a New York corporation (100% owned)
	 Dominion Stores, Inc., a Virginia corporation (100% owned)
	 Tultex International, Inc., a Virginia corporation (100% owned)
	 Logo 7, Inc., a Indiana corporation (100% owned)
	 Universal Industries, Inc., a Massachusetts corporation (100% owned)
	 Tultex Canada, Inc., a Canadian corporation (78% owned)
Exhibit 23.1
			CONSENT OF INDEPENDENT ACCOUNTANTS 			----------------------------------
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-12394, 33-20194, 33-43596 and 33-52247) of Tultex Corporaton of our report dated February 23, 1994 appearing on page 18 of this 10-K. We also consent to the cncorporation by reference of our report on the Financial Statement Schedules, which appears on page of this Form 10-K.
/s/Price Waterhouse - - ------------------- PRICE WATERHOUSE
Winston-Salem, North Carolina April 15, 1994
Exhibit 23.2
			CONSENT OF INDEPENDENT ACCOUNTANTS 			----------------------------------
We consent to the incorporaton by reference in the registration statement on Form 10-K of Tultex Corporation of our reports, dated March 19, 1992 on our audits of the consolidated financial statements and consolidated financial statements schedules of Universal Industries, Inc.
/s/ Coopers & Lybrand - - --------------------- COOPERS & LYBRAND
Boston, Massachusetts April 15, 1994