WestPoint Stevens Reports First Quarter 2004 Results WEST POINT,
Ga., May 10 /PRNewswire-FirstCall/ -- WestPoint Stevens Inc.
(BULLETIN BOARD: WSPT) ( http://www.westpointstevens.com/ ) today
reported results for the first quarter ended March 31, 2004. The
Company's net sales for the first quarter of 2004 increased 5.4% to
$399.6 million compared with $379.3 million a year ago. Bed Product
sales increased 9%, Bath Product sales increased 10% and Other
(Mill Stores and International) sales decreased 31%, primarily from
a reduction in the Company's mill store sales as a result of
restructuring initiatives that have reduced the total number of
retail stores to 38 from 57 in the year ago period. Furthermore,
one of the Company's foreign subsidiaries, WestPoint Stevens
(Europe) Ltd., filed for bankruptcy in the United Kingdom in August
of 2003 and is in the process of liquidating. WestPoint Stevens
Stores' same- store sales increased 6% in the first quarter of 2004
versus the year ago period. Net income for the first quarter of
2004 was a loss of $14.9 million or $0.30 per diluted share
compared with a loss of $16.9 million or $0.34 per diluted share in
2003. Loss before taxes for the first quarter of 2004 was $21.2
million compared with a loss before taxes in 2003 of $26.4 million.
Included in the first quarter of 2004 were $7.8 million in expenses
related to the Company's restructuring initiatives, and $8.1
million in expenses related to the current bankruptcy proceedings
compared with $4.3 million in expenses in the first quarter of 2003
related to WestPoint Stevens previously announced restructuring
initiatives. M. L. "Chip" Fontenot, WestPoint Stevens President and
CEO commented, "The first quarter saw continued improvement in the
retail environment. Against this backdrop we are maintaining the
high service levels that our customers expect from WestPoint
Stevens and remain adequately funded with availability under our
$300 million debtor-in-possession facility of $134 million at the
end of the first quarter." Mr. Fontenot continued, "The Company is
continuing to move forward on a consensual basis with negotiating
new terms for a Chapter 11 plan of reorganization with all its
major creditor constituencies and has recently received an
extension of its exclusive period to file such a plan through July
29, 2004." WestPoint Stevens Inc. is the nation's premier home
fashions consumer products marketing company, with a wide range of
bed linens, towels, blankets, comforters and accessories marketed
under the well-known brand names GRAND PATRICIAN, PATRICIAN,
MARTEX, ATELIER MARTEX, BABY MARTEX, UTICA, STEVENS, LADY
PEPPERELL, SEDUCTION, VELLUX and CHATHAM -- all registered
trademarks owned by WestPoint Stevens Inc. and its subsidiaries --
and under licensed brands including RALPH LAUREN HOME, DISNEY HOME
and GLYNDA TURLEY. WestPoint Stevens can be found on the World Wide
Web at http://www.westpointstevens.com/ . Safe Harbor Statement:
Except for historical information contained herein, certain matters
set forth in this press release are "forward-looking statements"
within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. Such forward-looking statements involve certain risks
and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements. Such risks
and uncertainties may be attributable to important factors that
include but are not limited to the following: Product margins may
vary from those projected; Raw material prices may vary from those
assumed; Additional reserves may be required for bad debts,
returns, allowances, governmental compliance costs, or litigation;
There may be changes in the performance of financial markets or
fluctuations in foreign currency exchange rates; Unanticipated
natural disasters could have a material impact upon results of
operations; There may be changes in the general economic conditions
that affect customer practices or consumer spending; Competition
for retail and wholesale customers, pricing and transportation of
products may vary from time to time due to seasonal variations or
otherwise; Customer preferences for our products can be affected by
competition, or general market demand for domestic or imported
goods or the quantity, quality, price or delivery time of such
goods; There could be an unanticipated loss of a material customer
or a material license; The availability and price of raw materials
could be affected by weather, disease, energy costs or other
factors; The future results of operations may be adversely affected
by factors relating to the Chapter 11 proceedings. The information
contained in this release is as of May 10, 2004. WestPoint Stevens
assumes no obligation to update publicly any forward-looking
statements, contained in this document as a result of new
information or future events or developments. FINANCIAL STATEMENTS
TO FOLLOW WESTPOINT STEVENS INC. Condensed Consolidated Statements
of Income (In thousands, except per share data) Three Months Ended
March 31, 2004 ProForma Restructuring Before And Other
Restructuring Items Actual Net sales $399,640 $- $399,640 Cost of
goods sold 328,517 2,957 331,474 Gross earnings (loss) 71,123
(2,957) 68,166 Selling, general and administrative expenses 55,785
- 55,785 Restructuring and impairment charge - 4,813 4,813
Operating earnings (loss) 15,338 (7,770) 7,568 Interest expense
17,813 - 17,813 Other expense-net 2,830 - 2,830 Chapter 11 expenses
8,119 - 8,119 Income (loss) before income tax expense (benefit)
(13,424) (7,770) (21,194) Income tax expense (benefit) (3,518)
(2,797) (6,315) Net income (loss) $(9,906) $(4,973) $(14,879) Basic
and diluted net income (loss) per common share $(0.20) $(0.30)
Basic and diluted average common shares outstanding 49,897 49,897
WESTPOINT STEVENS INC. Condensed Consolidated Statements of Income
(In thousands, except per share data) Three Months Ended March 31,
2003 ProForma Restructuring Before And Other Restructuring Items
Actual Net sales $379,263 $- $379,263 Cost of goods sold 302,973
2,895 305,868 Gross earnings (loss) 76,290 (2,895) 73,395 Selling,
general and administrative expenses 63,463 - 63,463 Restructuring
and impairment charge - 1,378 1,378 Operating earnings (loss)
12,827 (4,273) 8,554 Interest expense 32,465 - 32,465 Other
expense-net 2,505 - 2,505 Chapter 11 expenses - - - Income (loss)
before income tax expense (benefit) (22,143) (4,273) (26,416)
Income tax expense (benefit) (7,972) (1,538) (9,510) Net income
(loss) $(14,171) $(2,735) $(16,906) Basic and diluted net income
(loss) per common share $(0.28) $(0.34) Basic and diluted average
common shares outstanding 49,852 49,852 WESTPOINT STEVENS INC.
Condensed Consolidated Balance Sheets (In thousands) March 31,
December 31, March 31, 2004 2003 2003 Assets Current Assets Cash
and cash equivalents $7,035 $3,660 $2,663 Accounts receivable
247,827 243,507 115,819 Inventories 414,255 368,620 412,088 Prepaid
expenses and other current assets 26,549 32,996 35,510 Total
current assets 695,666 648,783 566,080 Property, Plant and
Equipment, net 604,681 616,422 696,532 Other Assets Deferred
financing fees 8,933 12,837 23,185 Other assets 1,443 1,737 2,839
Goodwill - - 46,298 $1,310,723 $1,279,779 $1,334,934 Liabilities
and Stockholders' Equity (Deficit) Current Liabilities Senior
Credit Facility $490,689 $490,689 $464,399 Second-Lien Facility
165,000 165,000 165,000 DIP Credit Agreement 113,137 89,017 -
Long-term debt classified as current - - 1,000,000 Accrued interest
payable 5,923 295 30,348 Accounts payable 60,203 56,198 63,159
Pension and other accrued liabilities 136,782 111,731 120,125 Total
current liabilities 971,734 912,930 1,843,031 Noncurrent
Liabilities Deferred income taxes 76,586 87,179 148,578 Pension and
other liabilities 147,210 141,936 164,925 Total noncurrent
liabilities 223,796 229,115 313,503 Liabilities Subject to
Compromise 1,086,846 1,086,869 - Stockholders' Equity (Deficit)
(971,653) (949,135) (821,600) $1,310,723 $1,279,779 $1,334,934
WESTPOINT STEVENS INC. Condensed Consolidated Statements of Cash
Flows (In thousands) Three Months Ended March 31, 2004 2003 Cash
flows from operating activities: Net loss $(14,879) $(16,906)
Adjustments to reconcile net loss to net cash provided by (used
for) operating activities: Depreciation and other amortization
16,656 18,885 Deferred income taxes (6,326) (9,474) Changes in
working capital (21,212) 11,190 Other-net 10,105 12,330 Non-cash
component of restructuring and impairment charge - 186 Net cash
provided by (used for) operating activities (15,656) 16,211 Cash
flows from investing activities: Capital expenditures (5,127)
(4,454) Net proceeds from sale of assets 38 13 Net cash used for
investing activities (5,089) (4,441) Cash flows from financing
activities: Senior Credit Facility: Borrowings - 338,000 Repayments
- (321,396) DIP Credit Agreement: Borrowings 207,120 - Repayments
(183,000) - Trade Receivables Program - (26,807) Net cash provided
by (used for) financing activities 24,120 (10,203) Net increase in
cash and cash equivalents 3,375 1,567 Cash and cash equivalents at
beginning of period 3,660 1,096 Cash and cash equivalents at end of
period $7,035 $2,663 Contact: Lorraine D. Miller, CFA Senior Vice
President Finance and External Communications 404.378.0491
DATASOURCE: WestPoint Stevens Inc. CONTACT: Lorraine D. Miller,
CFA, Senior Vice President Finance and External Communications of
WestPoint Stevens Inc., +1-404-378-0491 Web site:
http://www.westpointstevens.com/
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