WestPoint Stevens Reports Second Quarter 2004 Results WEST POINT,
Ga., Aug. 9 /PRNewswire-FirstCall/ -- WestPoint Stevens Inc.
(OTC:WSPT) (BULLETIN BOARD: WSPT) (
http://www.westpointstevens.com/ ) today reported results for the
second quarter ended June 30, 2004. The Company's net sales for the
second quarter of 2004 increased 4.7% to $383.0 million compared
with $365.7 million a year ago. Bed Product sales decreased 3% due
to slower sales of bedding accessories, Bath Product sales
increased 29% given WestPoint Stevens increased market share due to
a competitor's liquidation, and Other (Mill Stores and
International) sales decreased, 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 37 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
7% for the remaining stores in the second quarter of 2004 versus
the year ago period. Net income for the second quarter of 2004 was
a loss of $24.0 million or $0.48 per diluted share compared with a
loss of $72.0 million or $1.44 per diluted share in 2003. Loss
before taxes for the second quarter of 2004 was $33.1 million
compared with a loss before taxes in 2003 of $106.8 million.
Included in the second quarter of 2004 were $9.0 million in
expenses related to the Company's restructuring initiatives, and
$8.4 million in expenses related to the current bankruptcy
proceedings compared with $16.6 million in expenses in the second
quarter of 2003 related to WestPoint Stevens previously announced
restructuring initiatives and $6.2 million in expenses related to
the current bankruptcy proceedings. M. L. "Chip" Fontenot,
WestPoint Stevens President and CEO, commented, "The retail
environment was more challenging for home fashions in the second
quarter as retailers experienced slower sales growth in textile
home furnishings. Nevertheless, we increased our market share in
bath products in the quarter and are maintaining the high service
levels that our customers expect from WestPoint Stevens.
Furthermore, we remain adequately funded with availability under
our $300 million debtor-in-possession facility of $120 million at
the end of the second quarter." Mr. Fontenot continued, "The
Company is in the final stages of revising its business plan and 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. On July 30, the Company received an
additional extension of its exclusive period to file such a plan
through October 1, 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 August 9, 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. Contact: Lorraine D. Miller, CFA Senior
Vice President Finance and External Communications 404.378.0491
FINANCIAL STATEMENTS TO FOLLOW WESTPOINT STEVENS INC. Condensed
Consolidated Statements of Income (In thousands, except per share
data) Three Months Ended June 30, 2004 ProForma Restructuring
Before And Other Restructuring Items Actual Net sales $382,992 $-
$382,992 Cost of goods sold 325,165 5,502 330,667 Gross earnings
(loss) 57,827 (5,502) 52,325 Selling, general and administrative
expenses 56,292 - 56,292 Restructuring and impairment charge -
3,473 3,473 Goodwill impairment charge - - - Operating earnings
(loss) 1,535 (8,975) (7,440) Interest expense 19,099 - 19,099 Other
expense (income)-net (1,820) - (1,820) Chapter 11 expenses 8,383 -
8,383 Income (loss) before income tax expense (benefit) (24,127)
(8,975) (33,102) Income tax expense (benefit) (5,877) (3,231)
(9,108) Net income (loss) $(18,250) $(5,744) $(23,994) Basic and
diluted net income (loss) per common share $(0.36) $(0.48) Basic
and diluted average common shares outstanding 49,897 49,897 Three
Months Ended June 30, 2003 ProForma Restructuring Before And Other
Restructuring Items Actual Net sales $365,695 $- $365,695 Cost of
goods sold 303,317 4,677 307,994 Gross earnings (loss) 62,378
(4,677) 57,701 Selling, general and administrative expenses 60,937
- 60,937 Restructuring and impairment charge - 11,946 11,946
Goodwill impairment charge 46,298 - 46,298 Operating earnings
(loss) (44,857) (16,623) (61,480) Interest expense 31,194 - 31,194
Other expense (income)-net 7,924 - 7,924 Chapter 11 expenses 6,244
- 6,244 Income (loss) before income tax expense (benefit) (90,219)
(16,623) (106,842) Income tax expense (benefit) (28,811) (5,984)
(34,795) Net income (loss) $(61,408) $(10,639) $(72,047) Basic and
diluted net income (loss) per common share $(1.23) $(1.44) 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) Six Months Ended June 30,
2004 ProForma Restructuring Before And Other Restructuring Items
Actual Net sales $782,632 $- $782,632 Cost of goods sold 653,682
8,459 662,141 Gross earnings (loss) 128,950 (8,459) 120,491
Selling, general and administrative expenses 112,077 - 112,077
Restructuring and impairment charge - 8,286 8,286 Goodwill
impairment charge - - - Operating earnings (loss) 16,873 (16,745)
128 Interest expense 36,912 - 36,912 Other expense (income)-net
1,010 - 1,010 Chapter 11 expenses 16,502 - 16,502 Income (loss)
before income tax expense (benefit) (37,551) (16,745) (54,296)
Income tax expense (benefit) (9,395) (6,028) (15,423) Net income
(loss) $(28,156) $(10,717) $(38,873) Basic and diluted net income
(loss) per common share $(0.56) $(0.78) Basic and diluted average
common shares outstanding 49,897 49,897 Six Months Ended June 30,
2003 ProForma Restructuring Before And Other Restructuring Items
Actual Net sales $744,958 $- $744,958 Cost of goods sold 606,290
7,572 613,862 Gross earnings (loss) 138,668 (7,572) 131,096
Selling, general and administrative expenses 124,400 - 124,400
Restructuring and impairment charge - 13,324 13,324 Goodwill
impairment charge 46,298 - 46,298 Operating earnings (loss)
(32,030) (20,896) (52,926) Interest expense 63,659 - 63,659 Other
expense (income)-net 10,429 - 10,429 Chapter 11 expenses 6,244 -
6,244 Income (loss) before income tax expense (benefit) (112,362)
(20,896) (133,258) Income tax expense (benefit) (36,783) (7,522)
(44,305) Net income (loss) $(75,579) $(13,374) $(88,953) Basic and
diluted net income (loss) per common share $(1.51) $(1.78) Basic
and diluted average common shares outstanding 49,874 49,874
WESTPOINT STEVENS INC. Condensed Consolidated Balance Sheets (In
thousands) June 30, December 31, June 30, 2004 2003 2003 Assets
Current Assets Cash and cash equivalents $10,096 $3,660 $- Accounts
receivable 229,872 243,507 202,382 Inventories 417,291 368,620
415,519 Prepaid expenses and other current assets 20,157 32,996
43,103 Total current assets 677,416 648,783 661,004 Property, Plant
and Equipment, net 592,264 616,422 673,288 Other Assets Deferred
financing fees 6,082 12,837 20,646 Other assets 1,110 1,737 2,457
$1,276,872 $1,279,779 $1,357,395 Liabilities and Stockholders'
Equity (Deficit) Current Liabilities Senior Credit Facility
$486,419 $490,689 $490,091 Second-Lien Facility 165,000 165,000
165,000 DIP Credit Agreement 136,137 89,017 80,000 Accrued interest
payable 5,611 295 11,345 Accounts payable 51,974 56,198 37,954
Other accrued liabilities 140,638 111,731 100,579 Total current
liabilities 985,779 912,930 884,969 Noncurrent Liabilities Deferred
income taxes 5,373 87,179 113,033 Pension and other liabilities
144,994 141,936 151,068 Total noncurrent liabilities 150,367
229,115 264,101 Liabilities Subject to Compromise 1,087,450
1,086,869 1,104,571 Stockholders' Equity (Deficit) (946,724)
(949,135) (896,246) $1,276,872 $1,279,779 $1,357,395 WESTPOINT
STEVENS INC. Condensed Consolidated Statements of Cash Flows (In
thousands) Six Months Ended June 30, 2004 2003 Cash flows from
operating activities: Net loss $(38,873) $(88,953) Adjustments to
reconcile net loss to net cash provided by (used for) operating
activities: Depreciation and other amortization 33,300 37,748
Deferred income taxes (15,439) (44,245) Changes in working capital
(17,667) 39,181 Other-net 5,837 14,829 Non-cash component of
restructuring and impairment charge 1,818 6,959 Goodwill impairment
charge - 46,298 Net cash provided by (used for) operating
activities (31,024) 11,817 Cash flows from investing activities:
Capital expenditures (10,883) (6,649) Net proceeds from sale of
assets 5,493 92 Net cash used for investing activities (5,390)
(6,557) Cash flows from financing activities: Senior Credit
Facility: Borrowings - 720,333 Repayments (4,270) (678,037) DIP
Credit Agreement: Borrowings 426,120 130,000 Repayments (379,000)
(50,000) Fees associated with DIP Credit Agreement - (5,150) Trade
Receivables Program - (123,502) Net cash provided by (used for)
financing activities 42,850 (6,356) Net increase in cash and cash
equivalents 6,436 (1,096) Cash and cash equivalents at beginning of
period 3,660 1,096 Cash and cash equivalents at end of period
$10,096 $- DATASOURCE: WestPoint Stevens CONTACT: Lorraine D.
Miller, CFA, Senior Vice President Finance and External
Communications of WestPoint Stevens, +1-404-378-0491 Web site:
http://www.westpointstevens.com/
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