Dan River Inc. Announces Plant Consolidations.

Business Editors

DANVILLE, Va.--(BUSINESS WIRE)--Dec. 12, 2001

Dan River Inc. (NYSE: DRF) today announced that it will rationalize the weaving capacity of its Apparel Fabrics division to bring productive capacities in line with current demand levels.

The Company also announced it will reconfigure production in its Home Fashions division without any substantial change to capacity.

To implement these changes, 140 looms in the Company's Apparel Fabrics operation will be idled and 120 apparel fabrics looms will be relocated from Danville, VA to its Sevierville, TN plant. After making these adjustments, production for the Apparel Fabrics division will be sufficient to service its present and anticipated customer demand levels. The vacant space in Danville created by these moves will be utilized by installing wide modern airjet sheeting looms. The production from these newer looms will replace sheeting that is currently woven on projectile looms at the Company's Greenville, South Carolina Plant No. 1, which will be taken out of operation. The Greenville facility will continue to operate its airjet spinning and weaving Plant No. 2.

Additionally, the Company will close its Newnan, Georgia cut and sew facility. This production will be relocated to sewing plants in Brookneal and Danville, VA. This move will eliminate the fixed costs associated with the Newnan facility and improve process flow within Home Fashions operations.

"These consolidations," said Chairman and Chief Executive Officer Joseph L. Lanier, Jr., "are designed to improve manufacturing performance through reduced costs and better capacity utilization."

Arrangements for these changes have already begun and are expected to be substantially complete within the next 120 days. All 274 employees of the Newnan facility and 122 employees at the Greenville facility are affected. Increases in personnel will be required in Sevierville and several Virginia locations, netting the total overall reduction in personnel to about 190 employees. After this change, Dan River will employ approximately 6,800 in the U.S.

The Company will take a fourth quarter pre-tax charge of approximately $4.5 to $5.0 million, or $0.13 to $0.14 per share after tax, primarily a $3.5 million non-cash write-down of fixed assets. Ongoing annual savings expected to be realized from this change are in excess of $6.0 million.

"The decision to make these changes," Mr. Lanier continued, "was made after much study and consideration. We are thankful for the dedication we have received from our associates in Newnan and Greenville. We deeply regret the impact this will have on them and their communities."

Dan River Inc. is a leading manufacturer and marketer of textile products for the home fashions, apparel fabrics and industrial textiles markets. The company designs, manufactures and markets a coordinated line of value-added home fashions products consisting of bedroom furnishings such as comforters, sheets, pillowcases, shams, bed skirts, decorative pillows, and draperies for the adult, juvenile, and institutional markets. Dan River also manufactures and markets a broad range of high quality woven cotton and cotton blend fabrics for apparel. Additionally, Dan River manufactures and markets specialty engineered textile products used in making high-pressure hoses and other industrial products.

Note: This press release contains forward-looking statements under applicable securities laws. Our results of operations could be materially and adversely affected if we are unable to realize the savings anticipated from the plant consolidations described herein, or by other market and industry factors, many of which are outside our control. Risks generally associated with our business are detailed in our Current Report on Form 8-K filed with the SEC on July 20, 1998. We believe our forward-looking statements are reasonable; however, undue reliance should not be placed on such statements, which are based on current expectations.