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GALEY & LORD REPORTS FOURTH QUARTER RESULTS

 GREENSBORO, N.C., Nov. 17 ~PRNewswire~ -- Galey & Lord, Inc. (NASDAQ: GANL) today reported for the fourth quarter ended Oct. 3, 1992, sales of $89.1 million, net income applicable to common stock of $3.5 million and earnings per share of $.30 on a fully diluted basis. This compares to September quarter 1991 sales of $84.9 million, net income applicable to common stock of $1.7
million and earnings per share of $.21 on a fully diluted basis. The September quarter of 1991 net income applicable to common stock included an extraordinary gain for net operating loss carryforwards of $815 thousand or $.10 per share.
 The September quarter 1992 results were better due to improvement in woven fabrics and lower interest expense. The improvement in woven fabrics was primarily due to increased volume, shift in mix to more value added fabrics, and improved selling prices. Interest expense was reduced due to using proceeds from the initial public offering to reduce debt, the prime rate being lower, and the Company refinancing its term and revolver line of credit at lower rates. These improvements were partially offset by a decline in the sale of printed fabrics.
 Fiscal 1992 sales were $352.8 million, income before extraordinary items was $13.1 million and earnings per share before early redemption premium on preferred stock and extraordinary items was $1.30 on a fully diluted basis. Comparable numbers for fiscal 1991 were sales of $328.8 million, income before extraordinary items of $3.0 million and earnings per share of $.25.
 Fiscal 1992 was better due to improvements in woven fabrics and lower interest expense. The improvement in woven fabrics was primarily due to increased volume, shift in mix to more profitable styling, improved selling prices and improved plant operating efficiencies. The lower interest expense was due to the same factors discussed for September quarter 1992. Lower sales of printed fabrics partly offset these improvements.
 The Company completed its initial public offering on 5~7~92. The net proceeds were used to eliminate the Company's 14 percent subordinated debt and to redeem all of its Senior Preferred Stock. On 5~29~92, the Company completed refinancing agreements on its term loan and revolver. As previously reported, these transactions resulted in extraordinary loss on extinguishment of debt of $1.7 million (net of applicable income tax benefit of $1.0 million) or $.18 per share and a loss due to early redemption premium on preferred stock of $1.5 million or $.16 per share. In Fiscal 1991, the Company had an extraordinary gain of $815 thousand or $.10 per share for net operating loss carryforwards. Considering these factors, net income for fiscal 1992 was $11.4 million versus $3.8 million in fiscal 1991 and net income applicable to common stock (net income less the loss attributable to the early redemption premium paid on preferred stock and the accrual of dividends and accretion on the preferred stock) was $9.2 million or $.96 per share fully diluted compared to $2.8 million or $.35 per share fully diluted in fiscal 1991.
 The Company's order backlog was approximately $85 million at 10~3~92, a slight improvement over the $84 million backlog at 9~28~91.
 Arthur Wiener, Chairman and Chief Executive Officer, stated that the fiscal 1992 results were in line with the Company's business plan.
 Galey & Lord is a leading developer, manufacturer and marketer of high quality woven cotton and cotton blended apparel fabrics sold principally to well known manufacturers of sports wear for use in the production of men's, women's and children's pants and shorts and to manufacturers of commercial uniforms. The Company is also a leading manufacturer, designer and marketer of printed fabrics for use principally in women's and children's sportswear, dresses and separates.
 GALEY & LORD, INC.
 Selected Operating Results
 Amounts in Thousands, Except Per Share Data
 ACTUAL
 14 Weeks 13 Weeks 53 Weeks 52 Weeks
 Ended Ended Ended Ended
 10~3~92 9~28~91 10~3~92 9~28~91
 Net sales $ 89,056 $ 84,868 $352,765 $328,813
 Income before
 extraordinary item $ 3,537 $ 1,137 $ 13,109 $ 3,013
 Extraordinary loss on
 early extinguishment
 of debt $ - $ - $ (1,729) $ -
 Extraordinary credit-
 reduction of income
 taxes arising from
 carryforward of prior
 year's operating
 losses $ - $ 815 $ - $ 815
 Net income $ 3,537 $ 1,952 $ 11,380 $ 3,828
 Net income applicable
 to common stock before
 early redemption
 premium on preferred
 stock $ 3,537 $ 1,684 $ 10,714 $ 2,787
 Early redemption premium
 on preferred stock $ - $ - $ (1,485) $ -
 Net income (loss)
 applicable to common
 stock $ 3,537 $ 1,684 $ 9,229 $ 2,787
 Net income (loss) per
 share - Fully diluted
 basis:
 Average common shares
 outstanding 11,920 8,009 9,575 8,009
 Income per share before
 early redemption
 premium on preferred
 stock and extraordinary
 item $.30 $.11 $1.30 $.25
 Early redemption premium
 on preferred stock $ - $ - $(.16) $ -
 Extraordinary loss on early
 extinguishment of debt $ - $ - $(.18) $ -
 Extraordinary credit-
 reduction of income
 taxes arising from
 carryforward of prior
 year's operating losses $ - $.10 $ - $.10
 Net income (loss) per
 common share $.30 $.21 $.96 $.35
 CONSOLIDATED BALANCE SHEETS
 (Amounts in thousands)
 Oct. 3, Sept. 28,
 1992 1991
 ASSETS
 Current assets:
 Cash and cash equivalents $ 3,516 $ 5,168
 Trade accounts receivable 55,328 53,553
 Sundry notes and accounts
 receivable 170 121
 Inventories 55,827 46,275
 Prepaid expenses and other
 current assets 870 306
 Total current assets 115,711 105,423
 Property, plant and equipment,
 at cost 82,476 75,964
 Less accumulated depreciation
 and amortization (27,994) (21,656)
 54,482 54,308
 Deferred charges 522 1,867
 Intangibles 2,217 2,363
 $172,932 $163,961
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Current portion of
 long-term debt $ 11,674 $ 10,810
 Trade accounts payable 19,676 21,639
 Accrued salaries and employee
 benefits 7,662 6,135
 Accrued liabilities 1,801 3,556
 Income taxes payable 4,158 601
 Total current liabilities 44,971 42,741
 Commitments
 Long-term debt
 Related parties --- 11,000
 Other 80,286 95,458
 Deferred income taxes 1,992 ---
 Other long-term liabilities 480 431
 Accrued dividends - senior
 preferred stock --- 2,995
 Senior preferred stock at
 carrying value --- 6,925
 Stockholders' equity:
 Common Stock 115 80
 Contributed capital in excess
 of par value 32,448 920
 Retained earnings 12,707 3,478
 Treasury stock, at cost (67) (67)
 Total stockholder's equity 45,203 4,411
 $172,932 $163,961
 CONSOLIDATED STATEMENTS OF INCOME
 (Amounts in thousands, except per share data)
 14 Weeks 13 Weeks 53 Weeks 52 Weeks
 Ended Ended Ended Ended
 10~3~92 9~28~91 10~3~92 9~28~91
 Net sales $89,056 $84,868 $352,765 $328,813
 Cost of sales 78,241 76,185 309,711 297,947
 Gross profit 10,815 8,683 43,054 30,866
 Selling, general and
 administrative expenses 3,530 3,205 13,508 11,807
 Operating income before
 interest, other and
 income taxes 7,285 5,478 29,546 19,059
 Interest expense 1,681 3,203 9,653 14,340
 Other expense -- -- -- --
 Income before income
 taxes 5,604 2,275 19,893 4,719
 Income tax expense:
 Current 895 324 4,304 891
 Deferred 1,172 (1) 2,480 --
 Tax effect of loss
 carryforward -- 815 -- 815
 2,067 1,138 6,784 1,706
 Income before extraordinary
 item 3,537 1,137 13,109 3,013
 Extraordinary credit -
 reduction of income taxes
 arising from carryforward
 of prior year's operating
 losses -- 815 -- 815
 Extraordinary loss on
 extinguishment of debt
 (Net of income tax
 benefit of $1,042) -- -- (1,729) --
 Net income (loss) $3,537 $1,952 $11,380 $3,828
 Net income (loss) $3,537 $1,952 $11,380 $3,828
 Accrued preferred
 dividends -- (232) (576) (905)
 Accretion of
 preferred stock -- (36) (90) (136)
 Early redemption premium on
 preferred stock -- -- (1,485) --
 Net income (loss) applicable
 to common stock $3,537 $1,684 $9,229 $2,787
 Net income (loss) per
 common share:
 Primary:
 Average common shares
 outstanding 11,920 8,009 9,564 8,009
 Income per share before
 early redemption
 premium on preferred
 stock and extraordinary
 item $ .30 $ .11 $ 1.30 $ .25
 Early redemption premium
 on preferred stock -- -- (.16) --
 Income per share before
 extraordinary item $ .30 $ .11 $ 1.14 $ .25
 Extraordinary item -- .10 (.18) .10
 Net income~(loss) per
 common share - Primary $ .30 $ .21 $ .96 $ .35
 Fully Diluted:
 Average common shares
 outstanding 11,920 8,009 9,575 8,009
 Income per share before
 early redemption premium
 on preferred stock and
 extraordinary item $ .30 $ .11 $ 1.30 $ .25
 Early redemption premium
 on preferred stock -- -- (.16) --
 Income per share before
 extraordinary item $ .30 $ .11 $ 1.14 $ .25
 Extraordinary item -- .10 (.18) .10
 Net income~(loss) per
 common share - Fully
 Diluted $ .30 $ .21 $ .96 $ .35
 -0- 11~17~92
 ~CONTACT: Arthur C. Wiener, Galey & Lord, Inc., 212-465-3000~
 (GANL)


CO: Galey & Lord, Inc. ST: North Carolina IN: TEX SU: ERN

CM-SB -- CH010 -- 2075 11~17~92 17:25 EST
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Date:Nov 17, 1992
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