Rocky Mount Undergarment Co Inc – ‘10QSB’ for 4/2/95

As of:  Monday, 9/11/95   ·   For:  4/2/95   ·   Accession #:  84655-95-3   ·   File #:  0-03772

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Quarterly Report — Small Business   —   Form 10-QSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10QSB       Quarterly Report -- Small Business                     9     26K 
 2: EX-27       Financial Data Schedule (Pre-XBRL)                     1      6K 

10QSB   —   Quarterly Report — Small Business
Document Table of Contents

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                     
SECURITIES EXCHANGE ACT OF 1934                                   

For the quarterly period ended      April 2, 1995                     

OR

[ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE                     
SECURITIES EXCHANGE ACT OF 1934                                   

For the transition period from             to                         

 Commission file number 0-3772

ROCKY MOUNT UNDERGARMENT CO., INC.                    
(Exact name of the small business issuer as specified in its charter)           

DELAWARE                                56-1385522              
(State or other jurisdiction of         (I.R.S. Employer                      
incorporation or organization)          Identification No.)                     

1536 Boone Street, Rocky Mount, NC              27803                           
(Address of principal executive offices)

Registrant's telephone number, including area code: (919) 446-6161              

N/A               
(Former name, former address, and former fiscal year, if changed                
since last report)                                                              

Check whether the issuer (1) filed all reports required to be filed by Section  
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter  
period that the registrant was required to file such reports), and (2) has been 
subject to filing requirements for the past 90 days. Yes    X   No              

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY   
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:  
Indicate by check mark whether the registrant has filed all documents and       
reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act    
after the distribution of Securities under a plan confirmed by a court.         
Yes    X   No                                                                   

The number of shares outstanding of the issuer of common stock as of August 29, 
1995 was 9,198,400.                                                             

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 PART I. FINANCIAL INFORMATION
 -----------------------------

Item 1. FINANCIAL STATEMENTS                                                    
--------------------                                            

     ROCKY MOUNT UNDERGARMENT CO., INC. AND SUBSIDIARIES
     CONSOLIDATED BALANCE SHEETS
                                                  April         December
                                                 2, 1995        31, 1994
     ASSETS                      (unaudited)
                                                 -----------      ----------
CURRENT ASSETS:                                                                 
Cash                                            $   18,160     $    42,391  
Restricted cash                                    100,000         100,000  
Accounts receivable, net of allowances of                                   
$50,000 for uncollectible accounts                35,090          24,630
Notes Receivable-current portion                     3,296           3,560  
Inventories                                      1,183,792       1,440,792  
Prepaid expenses and other                         141,646         135,977  
                                              ----------      ----------
TOTAL CURRENT ASSETS                               1,481,984       1,747,350    

FIXED ASSETS:                                                                   

Property, Plant and equipment, net of accumulated                           
depreciation and amortization                    506,186         548,432

OTHER ASSETS                                                                    
Notes Receivable-net of current portion             46,440          46,440  
Loans receivable - officers                        159,000         159,000  
Other assets                                        13,496          13,496  
                                              ----------      ----------
                                          $    2,207,106    $  2,514,718
                                              ==========      ==========

LIABILITIES AND SHAREHOLDERS' EQUITY -                      

CURRENT LIABILITIES:                                                            
Due to factor                                   $  727,084     $   399,033  
Current portion of long-term debt                   38,663          40,673  
Accounts payable                                   776,919       1,080,213  
Accrued liabilities                                133,823         133,401  
Income taxes payable                                78,687          79,440  
                                              ----------      ----------
TOTAL CURRENT LIABILITIES:                         1,755,176       1,732,760    
                                              ----------      ----------

LONG-TERM DEBT - NET OF CURRENT PORTION               23,651          37,831    

STOCKHOLDERS' EQUITY                                                            
Common stock, par value $.0001-Authorized,                                  
10,000,000 shares; Issued, 8,428,400 and                                
4,675,900 shares                                     843             468
Additional paid-in capital                       7,168,323       7,686,150  

Retained earnings (deficit)                    (6,540,887)     (6,017,464)  
Treasury stock, at cost, 522,500 shares                  0       (925,027)  
                                              ----------      ----------
                                                 628,279         744,127
Less:  Subscriptions receivable                  (200,000)               -  
                                              ----------      ----------
  Total stockholders' equity                     428,279         744,127
                                              ----------      ----------
                                          $    2,207,106     $ 2,514,718
                                              ==========      ==========

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 ROCKY MOUNT UNDERGARMENT CO., INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)

                                              Three Months Ended
                                              ------------------
                                              April        April
                                               2, 1995     3, 1994
                                               ---------- ----------

REVENUES:                                                             
    Net sales                                 $ 1,772,440      $ 1,960,407
         Other income, net                         45,442           15,330
                                               ----------       ----------
                                                1,817,882        1,975,737
                                               ----------       ----------
COSTS AND EXPENSES:                                                   
    Cost of sales                               1,764,022        1,593,881
Selling, general and                                              
      administrative expenses                     479,041          521,928
    Financing costs                                98,242           83,082
                                               ----------       ----------
                                                2,341,305        2,198,891
                                               ----------       ----------

  LOSS BEFORE EXTRAORDINARY ITEMS AND           (523,423)        (223,154)
PROVISION FOR INCOME TAXES                                      

Provision for income taxes                         -          - 
                                               ----------       ----------
  LOSS BEFORE EXTRAORDINARY ITEMS               (523,423)        (223,154)
                                               ----------       ----------

REORGANIZATION ITEMS -                                                
    Professional fees                                   -         (67,435)
Gain on extinguish-                                               
      ment of debt                                      -        1,332,000
                                               ----------       ----------

  NET INCOME (LOSS)                           $ (523,423)      $ 1,041,411
                                               ==========       ==========

INCOME (LOSS) PER SHARE:                                              
    Loss from operations                        $  (0.08)        $  (0.07)
    Extraordinary items                              0.00             0.38
                                               ----------       ----------

                                                $  (0.08)          $  0.31
                                               ==========       ==========

WEIGHTED AVERAGE SHARES                                               
    OUTSTANDING                                 6,634,596        3,327,344
                                               ==========       ==========

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ROCKY MOUNT UNDERGARMENT CO., INC. AND SUBSIDIARIES   
CONSOLIDATED STATEMENTS OF CASH FLOWS   
(Unaudited) 

                                      Three Months Ended
                                       -----------------------
                                     April               April
                                     2, 1995             3, 1994
                                       ----------           ----------
CASH FLOWS FROM OPERATING ACTIVITIES:                                           
Net earnings (loss)                      $   (523,423)  $     1,041,411     
Adjustments to reconcile net earnings (loss)                                
to net cash provided by (used in)                                         
operating activities:                                                     
Depreciation                                  34,800           54,000   
Stock issued as finder's fee                   -               30,300   
Gain on extinguishment of debt                 -          (1,332,000)   
Gain on sale/abandon of PP&E                 (38,806)             -     
Changes in assets and liabilities:                                      
Accounts receivable                        (10,196)        (36,691) 
Inventories                                 257,000       (234,698) 
Prepaid expenses                            (5,669)         (3,129) 
Other assets                                 -                3,500 
Accounts payable                          (303,294)        (43,209) 
Accrued liabilities                             422       (161,262) 
Liabilities subject to compromise            -              129,755 
Income taxes payable                          (753)             -   
                                           ----------     ----------
Net cash provided by (used in)                                              
operating activities                        (589,919)       (552,023)   
                                           ----------     ----------
CASH FLOWS FROM INVESTING ACTIVITIES:                                           
Proceeds from sale of PP&E                       46,550             -       
Capital expenditures                              (298)         (1,357)     
                                         ----------     ----------
Net cash provided by (used in)                                              
investing activities                           46,252         (1,357)   
                                         ----------     ----------
CASH FLOWS FROM FINANCING ACTIVITIES:                                           
Net increase(decrease)in amount due to factor   328,051         760,051     
Principal payments on long-term debt           (16,190)        (50,826)     
Payments of liabilities subject to compromise       -         (407,426)     
Increase in long-term debt                          -            25,000     
Issuance of stock                               207,575         350,000     
                                           ----------       ----------
Net cash provided by (used in)                                              
financing activities                          519,436         676,799   
                                          ----------        ----------
NET (DECREASE) INCREASE IN                       (24,231)         123,419       
CASH, BEGINNING OF PERIOD                         142,391          48,138       
                                          ----------        ----------
CASH, END OF PERIOD                              $118,160        $171,557       
                                          ==========        ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                               
Cash paid during the period for income taxes    $   -      $        -       
Cash paid during the period for interest         68,412          50,201     

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ROCKY MOUNT UNDERGARMENT CO., INC.      
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS      
THREE MONTHS ENDED      
APRIL 2, 1995 AND APRIL 3, 1994       

Note 1: The condensed consolidated financial statements included      
herein have been prepared by the Company, without audit, pursuant to the        
rules and regulations of the Securities and Exchange Commission.  Certain       
information and disclosures normally included in financial statements           
prepared in accordance with generally accepted accounting principles have       
been condensed or omitted pursuant to such rules and regulations; however,      
the Company believes that the disclosures are adequate to make the              
information presented not misleading.  It is suggested that these condensed     
consolidated financial statements be read in conjunction with the               
consolidated financial statements and the notes thereto included in the         
Company's latest annual report on Form 10-KSB.                                  

In the opinion of management, the information contained in this report
reflects all adjustments necessary, which are of a normal recurring nature,     
to present fairly the results for the interim periods presented.                

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Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                    
CONDITION AND RESULTS OF OPERATIONS                       

RESULTS OF OPERATIONS                                                           

The poor results were due to problems in domestic manufacturing and   
inadequate continuity of product resulting in a big drop in production out      
put.                                                                            

Net sales of the Company's women's and children's intimate apparel    
business decreased in the first quarter of 1995 to $1,772,000 from              
$1,960,000 in the first quarter of 1994.                                        

Gross margins were .5% in the first three months of 1995 compared to  
18.7% for the first quarter of 1994.                                            

Selling, general and administrative expenses decreased approximately  
$43,000 during the first quarter of 1995 as compared to the first quarter       
of 1994 resulting directly from cost reductions and lower sales volume.         

Financing costs have increased in 1995 due to higher utilization      
of the over-advance financing line and adverse movement in interest rates.      

General adverse market factors and domestic management problems have  
prevented any noticeable benefit coming through in the financial results.       

During the last week of June 1995 management posted a notice under the
provisions of the Worker Adjustment and Retraining Notification Act (WARN).     
This effectively means the company will cease domestic sewing operations in     
late August, layoff over 100 employees and avoid further losses in              
manufacturing operations in North Carolina.                                     

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LIQUIDITY AND CAPITAL RESOURCES                                                 

The Company had a working capital deficit as of April 2, 1995 of      
approximately $273,192 as compared to working capital of approximately          
$14,590 as of December 31, 1994.                                                

On March 31, 1995, the Company concluded a new financing agreement    
with Finova Capital Corporation (formerly Ambassador Factors).  Under the       
terms of this agreement, the Company is entitled to receive an 85% advance      
on eligible accounts receivable and an over-advance not to exceed $600,000      
(based on 50% of certain inventory). The Company is currently dependent         
upon its new financing arrangement with Finova Capital Corporation. As of       
April 2, 1995, the Company was advanced approximately $1,600,000 on this        
financing and had available to it $72,000 for additional borrowing.             

Future losses will adversely affect the ability of the Company to     
continue in business.  The Company is endeavoring to take steps to make         
itself profitable.                                                              

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PART II:                    OTHER INFORMATION                                   

None Applicable                                                                 

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SIGNATURES      

In accordance with the requirements of the Securities Exchange Act,   
the registrant caused this report to be signed on its behalf by the             
undersigned, thereunto duly authorized.                                         

              ROCKY MOUNT UNDERGARMENT CO., INC.

By: /s/Joseph Pascal
   Joseph Pascal
President 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10QSB’ Filing		Date		First		Last			Other Filings
Filed on:		9/11/95							10KSB/A
		8/29/95		1
For Period End:		4/2/95		1		7
		3/31/95		7
		12/31/94		7					10KSB,  10KSB/A
		4/3/94		5
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