SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

____________________

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS

PURSUANT TO SECTIONS13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Mark One)

[X] Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

For the fiscal year ended December 30, 2000
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 1-605
Hampton Industries, Inc.
(Exact name of registrant as specified in its charter)
North Carolina
56-0482565 
(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)
2000 Greenville Hwy., P.O. Box 614, Kinston, NC
28502-0614
(Address of principal executive offices)
(ZIP Code)
Registrant's telephone number, including area code: (252) 527-8011 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Name of each exchange on which registered
Common Stock of $1.00 par value share 
American Stock Exchange 
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES XNo

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporatedby reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý
On April 16, 2001, the aggregates market value of the common shares (based upon the closing prices of these shares on the American Stock Exchange) of Hampton Industries, Inc. held by non-affiliates was approximately $2,721,000. 

The number of shares of the registrant's Common Stock outstanding as of April 16, 2001 was 5,553,374.
** 

 

PART I

ITEM 1. BUSINESS**
(a) 	General Development of Business

Hampton Industries, Inc. and its subsidiaries and divisions (herein referred to as "Hampton" or "Company") are engaged in the business of manufacturing and selling apparel. Hampton, a North Carolina Corporation, is the successor ofseveral predecessor corporations, the first of which was incorporated in 1925 in the State of New York under the name of Hampton Shirt Company.

(b)	Financial Information about Industry Segments

Hampton has been engaged in one line of business in excess of five years; reference is made to the financial statements included herein under **ITEM 8. Financial Statements and Supplementary Data.**
(c)	Narrative Description of Business

The Company is engaged in the business of manufacturing and selling apparel and operates in one industry segment. Substantially all sales to third party customers are made to destinations in the United States. The products consist principally of men'sand boys' shirts and men's sleepwear, which are produced domestically and in Central America. In addition, sport and dress shirts, sweaters, activewear, outerwear and swimtrunks, for both men and boys are imported from unaffiliated sources locatedprimarily in the Far East. Hampton's products are principally sold at retail under licensed and Company owned brands. Branded apparel was a significant part of the Company's business and is manufactured and sold under the following licenses: 

LICENSES
PRODUCT CATEGORY
Nautica for Children (1)
Boys', girl's, and infant's apparel
Rawlings
Men's activewear
Dickies (1)
Men's casual and rugged sportshirts

Final sales will occur in 2001

DISCONTINUED LICENSES
PRODUCT CATEGORY
Spalding 
Men's and boys' activewear
Justin 
Men's western wear
Bugle Boy 
Men's and boys' sleepwear and robes
Joe Boxer 
Children's apparel
Warner Brothers 
Men's sleepwear and robes, and children's robes and novelty apparel

 

Hampton owns the following trademarks:

TRADEMARK
PRODUCT CATEGORY
Kaynee
Boys' and girl's school uniforms
Le Tigre
Men's and boys' sportswear
Campus
Men's and boys' sportswear 
Flipbox
Young men's sportswear

As of April 2, 2001 Hampton has sold the assets of its Nautica Division to Nautica Enterprises, Inc. Prior to this transaction Hampton received from Nautica a notice of default under its license agreement. In addition, Hampton has anotice of default from Williamson- Dickie Manufacturing Company for its Dickies license***.*
Hampton designs its line of apparel, which is manufactured from various combinations of man-made and natural fibers that are readily available from a number of sources both domestically and imported. Hampton has no long-term contracts with anysupplier. The average domestic production cycle is approximately five weeks from the time the fabric is scheduled for cutting until the finished product is received at the Company's distribution centers. The production cycle for goods imported ormanufactured in Central America is approximately ten weeks, while the lead time for goods imported from the Far East can be as long as six months. The Company provides the design and production specifications for imported products to the manufacturers.

Hampton's products are sold throughout the United States, to approximately 2,360 customers including most of the country's leading national and regional retail chains and department stores. Sales are made by a nationwide sales staff of 36 salesmen atthe end of 2000. The Company's sales office is located in New York, and the Company's executive and administrative headquarters is in Kinston, North Carolina. As of December 30, 2000 the Company had approximately 437 full-time associates domestically andapproximately 548 associates in the Caribbean*.* Hampton is not a party to any collective bargaining agreements, has never experienced a strike, and believes that it maintains satisfactory relationships with its associates.

Hampton's three largest customers accounted for approximately 24%, 33%, and 32% of consolidated sales volume in 2000, 1999, and 1998, respectively. K-Mart, Wal-Mart Stores, Inc. and J.C. Penney Co. are large multi-outlet retail chains who purchase abroad range of Hampton's products through a variety of their merchandising departments. There are no long-term contracts with these customers for continued business, other than purchase orders already received. The following is a breakdown of theirrespective sales volume for each of the last three fiscal years: 

	
2000
 
1999
 
1998
K-Mart
11%
 
12%
 
6%
Wal-Mart Stores, Inc.
 7%
 
 8%
 
12%
J.C. Penney Co.
 6%
 
13%
 
14%
 
24%
 
33%
 
32%

 

The following is a breakdown of sales by apparel categories for each of the last three fiscal years: 

	
2000
 
1999
 
1998
Men's shirts and sportswear 
25%
 
28%
 
31%
Boys' shirts and sportswear
45%
 
31%
 
31%
Activewear
12%
 
15%
 
12%
Men's sleepwear
16%
 
14%
 
13%
Ladies' sleepwear
2%
 
11%
 
12%
Other
-
 
1%
 
1%
 
100%
 
100%
 
100%

Sales of branded products accounted for 66%, 55%, and 41% of the consolidated sales for 2000 and the prior two years, respectively*.*
The following reflects the Company's sourcing of its products for each of the last three fiscal years: 

	
2000
 
1999
 
1998
Imports
 62%
 
 64%
 
 58%
Caribbean
 27%
 
 22%
 
 24%
Domestic
 11%
 
 14%
 
 18%
 
100%
 
100%
 
100%
	

All foreign purchases are contracted for in U.S. dollars; therefore, there is no currency risk.

As of April 2, 2001 Hampton's backlog of orders was approximately $86,826,000 as compared to $101,272,000 on March 5, 2000. The orders are believed to be firm and are expected to be shipped during the current fiscal year. A portion of these orders wassold to Nautica Enterprises on April 2, 2001 and would reduce this backlog of orders by $31,662,000 to $55,164,000.

The apparel industry is highly competitive as to style, quality and price. Hampton competes with many other manufacturers and suppliers in each of its products.

 
**(d)	Executive Officers of Registrant**

Name and age
Office
First year appointed to current office
David Fuchs (76)
Chairman and Chief Executive Officer
1975
Steven Fuchs (41)
President
1996
Roger M. Eichel (52)
Senior Vice President and Secretary
1993
Frank E. Simms (52)
Chief Financial Officer, Vice President of Finance, and Treasurer
1997

Each of the above named was appointed for one year or until the election of a successor. There is no arrangement or understanding between any of the above pursuant to which they were appointed as Officers. Steven Fuchs has an employmentcontract that, among other things, determines compensation due to separation of employment.

All of the Executive Officers above, except Frank Simms, are related family members. Steven Fuchs is the son of David Fuchs, and Roger Eichel is David Fuchs' son-in-law. 

David Fuchs has held his current executive position in excess of five years. Steven Fuchs was elected to his present position in January 1996. From 1993 to January 1996, Steven Fuchs was the President of Hampton Shirt Co. (a subsidiary). Prior to1993, he held various positions with the Company. Roger Eichel was elected to his present position in May 1993, and prior thereto, he was Secretary of the Company. Frank Simms was elected Chief Financial Officer in November 1997, Treasurer in 1999, andhad previously been Vice President of Finance since May 1995. Prior to joining Hampton he was the Chief Financial Officer of Riverside Manufacturing Co. in excess of five years. 

David Fuchs, Steven Fuchs and Roger Eichel are also Directors of the Company.

 
**ITEM 2. PROPERTIES**
Hampton owns one manufacturing plant in the Caribbean and two domestic distribution centers. At the beginning of 2000, Hampton also owned three domestic manufacturing plants, and an additional distribution center. Plans were made to close, andsubsequently sell, all four of these properties. The sale of these assets took place in the third and fourth quarters of the year 2000. The Company's sales and merchandising personnel occupy a building located in New York City. Hampton's principalexecutive and administrative offices are located in North Carolina. All of these properties are owned by the Company. The New York office is subject to a mortgage loan. This mortgage is secured by the underlying assets, and is not guaranteed by the Company.

As of April 3, 2001 the Company has entered into an agreement to sell the New York sales office for $15,500,000, subject to the assumption of the mortgage by the buyer. The anticipated closing is expected to occur on May 15, 2001. 

The Company believes that its plant and facilities are in good repair and adequate in respect to its foreseeable needs. The machinery and equipment utilized in its facilities are considered by management to be modern and efficient.
**ITEM 3. LEGAL PROCEEDINGS**
There are no significant legal proceedings.

 
**ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**
None
**PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS**
(a) Principal Market

The principal market on which Hampton's Common Stock is traded is the American Stock Exchange under the symbol "HAI".

(b) Stock Price and Dividend Information

The table below presents the high and low market prices for Hampton's Common Stock.

Quarter Ended
04/01/00
07/01/00
09/30/00
12/30/00
High
2 13/16
2 3/8
1 15/16
1 11/16
Low
1 13/16
1 1/2
1 1/4
5/8
Quarter Ended
03/27/99
06/26/99
09/25/99
01/01/00
High
6
5 3/8
4 1/2
3 1/2
Low
5 1/8
3 3/4
3 5/8
2

The Company has not paid a cash dividend on its common stock since 1973. The Board of Directors declared a 10% stock dividend in 1999 and 1998. Market prices per share have been restated for all periods presented to reflect the stockdividends. The present credit agreement includes restrictive covenants, which, among other things, prevent the payment of cash dividends.

(c) Approximate Number of Holders of Common Stock

The number of holders of record of Hampton's Common Stock as December 30, 2000 was approximately 237, including, as a single holder of record, brokerage firms having more than one stockholder account.
**ITEM 6. SELECTED FINANCIAL DATA**
(In thousands except per common share amounts)
0.001**Year Ended:**2000**1999***1998**1997**1996
Net Sales
$ 182,440 
$ 192,561 
$ 190,330 
$ 163,040 
$ 160,684 
Net (loss) earnings 
$ (30,638)
$ (4,756)
$ 2,416 
$ 1,083 
$ 2,709 
Basic (loss) earnings per common share
$ (5.52)
$ (0.86)
$ 0.44 
$ 0.20 
$ 0.54 
Diluted (loss) earnings per common share ** 
$ (5.52)
$ (0.86)
$ 0.43 
$ 0.19 
$ 0.54 **At Year End:
Total assets
$ 76,632 
$ 118,135 
$ 94,321 
$ 78,042 
$ 74,421 
Long-term debt
$ 220 
$ 11,201 
$ 302 
$ 4,110 
$ 5,103 
Working capital
$ 8,327 
$ 43,997 
$ 40,255 
$ 40,648 
$ 40,158 
Stockholders' equity
$ 20,946 
$ 51,585 
$ 56,342 
$ 53,907 
$ 52,820 
* 53 Weeks
**Potential common shares have been excluded for 2000 and 1999 because they are anti-dilutive.
The Company has not paid cash dividends on its common stock since 1973. The Board of Directors declared a 10% common stock dividend in 1999 and 1998. The dividends were payable on July 2nd of both years, to stockholders of record on June 2nd of both years. Basic and diluted earnings per share and outstanding stock options have been restated for all periods presented to reflect the stock dividends.

The Company uses the LIFO method of costing on principally all of its inventories. The LIFO method decreased the loss by $1,314,300 ($.24 per share) in 2000 and $635,000 ($.11 per share) in 1999. The LIFO method increased earnings by $514,500 ($.09per share) in 1998. Inventory liquidation in 2000 reduced the loss by $1,560,100 ($.28 per share). There was an increase in inventories in 1999 and 1998. 
**ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS**
The following discussion and analyses of the consolidated results of operations and financial conditions should be read in conjunction with the accompanying financial statements and related notes to provide additional information concerning theCompany's financial activities and conditions. 
**Results of Operations

The following table summarizes operating data (as a percent of net sales) for the periods indicated: 

YEAR ENDED
December 30, 2000
January 1, 2000*
December 26, 1998
Net Sales
100.0 
%
100.0 
%
100.0 
%
Cost of products sold
86.7 
75.6 
76.5 
Gross margin
13.3 
24.4 
23.5 
Selling, general and administrative
26.2 
25.8 
20.2 
Equity in earnings of
unconsolidated affiliates
- 
- 
(0.1)
Restructuring charge
0.7 
0.5 
- 
Operating (loss) income
(13.6)
(1.9)
3.4 
Other (income) expense:
Rental income - net
(0.5)
(0.5)
(0.5)
Loss on disposal of fixed assets
0.1 
- 
- 
Other (income) expense - net
(0.1)
0.1 
- 
Interest Expense
3.5 
2.2 
1.9 
(Loss) earnings before (benefit of )
provision for income taxes
(16.6)
(3.7)
2.0 
Net (loss) earnings
(16.8)
%
(2.5)
%
1.3 
%
*53 Weeks
 The Company is engaged in the business of manufacturing and selling apparel and operates in one industry segment. Substantially all sales to third party customers are made to destinations in the United States. The productsconsist principally of men's and boys' shirts and men's and women's sleepwear, which are produced domestically and in Central America. In addition, sport and dress shirts, sweaters, activewear, outerwear and swim trunks, for both men and boys are importedfrom unaffiliated sources located primarily in the Far East.	
**Fiscal 2000 Versus Fiscal 1999

Net sales for 2000 decreased by $10,121,000 or 5.3%. Sales of branded product increased by $13,719,000 to 66% of total sales in 2000 from 55.4% in 1999. The increase in sales of branded products was a result of the closeout sales mentionbelow. Increased sales of the Nautica and Joe Boxer brands were the principal contributors to the increased sales volume. Non branded product sales decreased by $23,840,000.

During fiscal 2000, gross profit decreased by approximately $22,700,000 as compared to the previous year. As a percentage of sales this represented a decrease of 11.1%, from 24.4% in 1999 to 13.3% in 2000. This decline in the gross profit wasprimarily due to substantial closeout sales in the Nautica, Saylu and Joe Boxer product lines. The later two lines, Saylu and Joe Boxer, were discontinued during the current fiscal year.

Selling, general and administrative expenses decreased by $1,941,000 in 2000. These costs were 26.2% of net sales in 2000 as compared to 25.8% in 1999. This decrease was due primarily to reductions in the workforce, freight, and sample costs of$2,405,000, $548,000, and $641,000 respectively. Increases in royalty expense of $557,000 and advertising expenses of $484,000 were primarily due to the increase in sales of branded product. Amortization (store fixtures and software costs) and outletstore rental expenses increased by $245,000 and $300,000, respectively in 2000.

A portion of the Company's corporate office building in New York is leased to third parties. Operations related to this are classified as Rental income - net. 

Other income was $204,000 in 2000 as compared to an expense of $167,000 in 1999. This change is primarily due to the receipt of life insurance proceeds in the year 2000. 

In November of 1999, the Board of Directors of the Company approved a restructuring plan that resulted in the announcement to close two domestic sewing factories located in Warrenton, NC, and Martinsville, VA, leaving one remaining factory inWashington, NC. These closures were due to an increasing shift to sales of branded product, which is primarily imported. The closure in Martinsville was completed in December 1999, and the Warrenton closure was completed in March 2000. This plan alsoincluded the elimination of certain positions within the selling and administrative functions of the Company. The restructuring charge amounted to $936,000, which includes only the direct termination benefits along with the related fringe benefits. Thisplan resulted in the reduction of approximately 298 full time associates or 30% of the domestic work force. This plan was completed during the first quarter of 2000. In addition, this plan included the decision to no longer offer for sale the ladiessleepwear product line. This product line was primarily private label and was the only ladies offerings by the Company.

In June 2000, the Board of Directors of the Company approved an additional restructuring plan that included the closure of the remaining sewing facility in Washington, NC and the cutting operation in Kinston, NC, and the consolidation of thedistribution center in Martinsville. This plan resulted in the reduction of approximately 197 full-time associates, or 20% of the domestic workforce. The restructuring charge amounted to $300,000, which includes only the direct termination benefits alongwith the related fringe benefits. All closed facilities were sold in the third and fourth quarters of 2000.

In September 2000, management implemented a plan to consolidate certain selling divisions and to reorganize certain administrative areas. This plan resulted in the reduction of approximately 42 full time associates, or 6% of the workforce. Therestructuring charge amounted to $910,000, which includes the direct termination benefits, along with the related fringe benefits, non-cash write-downs to realizable value of certain assets, and other charges.

Following is a summary of the restructuring charges and reserves:

November 1999 
June 2000 
September 2000 
Total 
Restructuring charges
$ 935,627 
$ - 
$ - 
$ 935,627 
Paid or charged
(224,357)
- 
- 
(224,357)
Balance January 1, 2000
711,270 
- 
- 
711,270********************