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PARAGON ANNOUNCES 1992 RESULTS

 FEDERAL WAY, Wash., Feb. 22 /PRNewswire/ -- Paragon Trade Brands Inc. (NYSE: PTB) announced net sales of $484,776,000 and pro forma net earnings of $17,766,000 for the fiscal year ended Dec. 27, 1992, compared with net sales of $396,323,000 and pro forma net earnings of $17,477,000 for fiscal 1991. In the fourth quarter of 1992, Paragon recorded net sales of $123,191,000 and pro forma net earnings of $4,212,000, compared with net sales of $98,195,000 and pro forma net earnings of $4,058,000 in the fourth quarter of 1991. Pro forma net earnings per share were $1.55 per share in fiscal 1992, compared with $1.52 in fiscal 1991. Pro forma information is intended to reflect results of Paragon as an independent company.
 Paragon became an independent, publicly owned company in late January 1993 following an initial public offering by Weyerhaeuser Co. (NYSE: WY), representing its entire ownership interest in Paragon. Prior to the public offering, Paragon's operations were conducted as the private label diaper business of Weyerhaeuser. Pro forma net earnings represent the actual results of Weyerhaeuser's private label disposable diaper business, adjusted to reflect on a pro forma basis certain expenses expected to be incurred by Paragon as an independent company. The pro forma results are intended to provide a basis for comparison of results of operations in future periods. Actual results for the 1991 and 1992 fiscal years and for the 1991 and 1992 fourth quarters reflect the operation of Paragon as the private label disposable diaper business of Weyerhaeuser Co.
 Operating as a division of Weyerhaeuser, actual 1992 net earnings for the private label diaper business were $21,103,000, compared with 1991 net earnings of $20,968,000. Actual fourth-quarter net earnings were $5,042,000, compared with fourth-quarter 1991 net earnings of $4,917,000. Earnings for 1992 grew at a slower rate than sales due to startup costs associated with the new training pant product and the costs of developing a company sales force while continuing to pay broker commissions for much of the year. In addition, earnings for the fourth quarter of 1992 were impacted in October and November by reduced sales volume as a result of the implementation of price reductions by a national branded manufacturer while a large number of previously circulated and committed coupons remained outstanding.
 Paragon Trade Brands is the leading manufacturer of private label infant disposable diapers in the United States and Canada. The company manufactures a line of premium and economy diapers which are distributed throughout the United States and Canada, primarily through grocery and food stores, mass merchandisers, warehouse clubs, toy stores and drug stores that market the products under their own store brand names.
 PARAGON TRADE BRANDS INC.
 PRO FORMA EARNINGS STATEMENT
 (Dollars in thousands)
 For The Year Ended:
 Dec. 27, 1992 Dec. 29, 1991
 Historical Adjust. Pro Forma Historical Adjust. Pro Forma
 Net sales $484,776 0 $484,776 $396,323 0 $396,323
 Cost of
 sales 399,919 0 399,919 322,884 0 322,884
 Gross profit 84,857 -- 84,857 73,439 -- 73,439
 Selling,
 general and
 administrative
 expense 43,472 4,170(A) 47,642 34,357 4,170(A) 38,527
 R&D expense 6,627 0 6,627 5,704 0 5,704
 Total
 expenses 50,099 4,170 54,269 40,061 4,170 44,231
 Operating
 earnings 34,758 -4,170 30,588 33,378 -4,170 29,208
 Other income
 (expense) -741 0 -741 175 0 175
 Interest
 expense -- 1,212(B) 1,212 0 1,416(B) 1,416
 Earnings before
 taxes 34,017 -5,382 28,635 33,553 -5,586 27,967
 Provision for
 taxes 12,914 -2,045 10,869 12,585 -2,095 10,490
 Net
 earnings $ 21,103 -3,337 $ 17,766 $ 20,968 -3,491 $ 17,477
 Earnings per
 share -- -- $ 1.55 -- -- $ 1.52
 Shares
 outstanding -- -- 11,500 -- -- 11,500
 NOTE (A): Reflects certain additional costs in excess of the historical charges by Weyerhaeuser, principally in the areas of insurance and employee benefits, to the private label diaper business and additional costs of corporate, administrative and public financial reporting activities not previously undertaken.
 NOTE (B): Reflects (i) interest expense for borrowings under a $70,000,000 credit facility with interest calculated on $9,175,000 of outstanding principal debt for 1992 and for 1991, (ii) the amortization of deferred financing costs and (iii) the commitment fee of 0.5 percent per annum on the unused portion of the credit facility.
 PARAGON TRADE BRANDS INC.
 PRO FORMA EARNINGS STATEMENT
 (Dollars in thousands)
 For The Quarter Ended:
 Dec. 27, 1992 Dec. 29, 1991
 Historical Adjust. Pro Forma Historical Adjust. Pro Forma
 Net sales $123,191 0 $123,191 $98,195 0 $98,195
 Cost of
 sales 102,007 0 102,007 80,125 0 80,125
 Gross profit 21,184 -- 21,184 18,070 -- 18,070
 Selling,
 general and
 administrative
 expense 10,535 1,042(A) 11,577 8,869 1,042(A) 9,911
 R&D expense 1,962 0 1,962 1,563 0 1,563
 Total
 expenses 12,497 1,042 13,539 10,432 1,042 11,474
 Operating
 earnings 8,687 -1,042 7,645 7,638 -1,042 6,596
 Other income
 (expense) -506 0 -506 230 0 230
 Interest
 expense -- 296(B) 296 0 333(B) 333
 Earnings before
 taxes 8,181 -1,338 6,843 7,868 -1,375 6,493
 Provision for
 taxes 3,139 -508 2,631 2,951 -516 2,435
 Net
 earnings $ 5,042 -830 $ 4,212 $ 4,917 -859 $ 4,058
 Earnings per
 share -- -- $ 0.37 -- -- $ 0.35
 Shares
 outstanding -- -- 11,500 -- -- 11,500
 NOTE (A): Reflects certain additional costs in excess of the historical charges by Weyerhaeuser, principally in the areas of insurance and employee benefits, to the private label diaper business and additional costs of corporate, administrative and public financial reporting activities not previously undertaken.
 NOTE (B): Reflects (i) interest expense for borrowings under a $70,000,000 credit facility with interest calculated on $9,175,000 of outstanding principal debt for 1992 and 1991, (ii) the amortization of deferred financing costs and (iii) the commitment fee of 0.5 percent per annum on the unused portion of the credit facility.
 -0- 2/22/93
 /CONTACT: Cliff Bickell, vice president, chief financial officer and treasurer, of Paragon Trade Brands, 206-924-4568/
 (PTB WY)


CO: Paragon Trade Brands; Weyerhaeuser Co. ST: Washington IN: PAP SU: ERN

SW-JH -- SE006 -- 9069 02/22/93 16:51 EST
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Date:Feb 22, 1993
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