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FIELDCREST CANNON REPORTS THIRD QUARTER RESULTS; SALES UP 6 PERCENT

 EDEN, N.C., Oct. 20 /PRNewswire/ -- Fieldcrest Cannon, Inc. (NYSE: FLD), produced strong sales increases in the third quarter of 1993. Net sales from continuing operations increased 6 percent in the third quarter of 1993 to $256.7 million from $243.1 million in the third quarter of 1992. Income from continuing operations for the quarter, before non-recurring charges, was $7.0 million, or $.58 per share, compared to $5.8 million , or $.48 per share, in the third quarter of 1992. After the non-recurring charges described below, and the gain on the sale of the carpet and rug division, net income for the third quarter of 1993 was $7.9 million, or $.65 per primary share, compared to $6.6 million, or $.55 per primary share, in the third quarter of 1992.
 As part of its ongoing efforts to lower operating costs, the company announced a voluntary early retirement program on Sept. 8, 1993. The program was offered to approximately 400 of the company's employees who have until Nov. 1, 1993, to decide whether to participate. Based on anticipated participation, a pretax restructuring charge of $10 million was accrued in the third quarter reducing net income by $6.1 million, or $.50 per primary share.
 Effective August 1993, the federal statutory income tax rate increased from 34 percent to 35 percent, retroactively to Jan. 1, 1993. This rate change increased income tax expense and reduced net income from continuing operations by $1.4 million, or $.12 per primary share in the third quarter of 1993 predominately due to an adjustment to existing deferred tax balances as required under FAS 109.
 On July 30, 1993, the company sold its carpet and rug division to Mohawk Industries and recognized a $9.2 million after-tax gain, or $.76 per primary share, on the disposition. An operating loss during July 1993 from carpet and rug operations reduced net income by $.8 million, or $.07 per primary share, for the third quarter of 1993 compared to net income of $.8 million, or $.07 per primary share, in the third quarter of 1992.
 Sales in the third quarter of 1993 were higher in each of the Bed, Bath and Blanket divisions as compared to the comparable quarter in 1992. Third quarter 1993 sales also include $3.0 million of Caldwell branded towel sales in Canada. Operating income, before the restructuring charge, was $17.5 million for the third quarter of 1993 compared to $18.2 million in the third quarter of 1992. The decline was due primarily to reduced plant activity and competitive pricing pressures. Bed, Bath and Blanket division inventories of $230.1 million at Sept. 30, 1993 compare to $210.6 million at Sept. 30, 1992.
 For the first nine months of 1993, sales from continuing operations were $717.2 million, compared to $710.9 million in the corresponding period a year ago. Income from continuing operations before the non-recurring items discussed above was $13.8 million, or $1.14 per share, for the first nine months of 1993 compared to $9.9 million, or $.90 per share, for the comparable 1992 period.
 As previously announced, the company has agreed to acquire Amoskeag Company for $40 per share in cash. Pursuant to the merger agreement dated as of Aug. 13, 1993, a tender offer for all of Amoskeag's common stock at $40 per share is currently outstanding. After completion of the tender offer, the remaining outstanding Amoskeag common stock will be acquired in a merger at the same price. Financing for the acquisition in the amount of approximately $137.6 million will be obtained through the issuance of preferred stock for net proceeds of approximately $72 million and the balance through borrowings under the company's existing revolving credit facility.
 The company anticipates mailing materials to shareowners soon in connection with shareowner approval of an amendment to the company's Certificate of Incorporation to authorize 10 million shares of preferred stock and to approve the issuance of the preferred stock referred to above.
 Amoskeag Company owns 3.6 million shares of the company's Class B Common Stock, representing approximately 30 percent of the equity of the company and 80 percent of the voting power. Upon consummation of the acquisition of Amoskeag, the 3.6 million shares of the company's Class B common Stock held by Amoskeag will no longer be outstanding for the purpose of voting or earnings per share calculations. The acquisition will shift control of the company to its public shareowners. The company intends to implement a profit improvement plan which is expected to result in substantial long-term value for shareowners.
 Fieldcrest Cannon, Inc. manufactures and markets bed and bath products under the Fieldcrest, St. Mary, Cannon Royal Family, Cannon Monticello, and private brand labels.
 Fieldcrest Cannon, Inc. common stock is traded on the New York Stock Exchange under the symbol "FLD."
 FIELDCREST CANNON, INC.
 Condensed Consolidated Statements
 (dollars in thousands except per share data)
 Consolidated Statement of Income
 Periods ended Three Months Nine Months
 Sept. 30, 1993 1992 1993 1992
 Net sales $256,710 $243,149 $717,175 $710,911
 Cost of sales 213,755 199,294 598,052 593,174
 Selling, general and
 administrative 25,484 25,613 75,751 74,389
 Restructuring charges 10,000 --- 10,000 ---
 Total operating costs and
 expenses 249,239 224,907 683,803 667,563
 Operating income 7,471 18,242 33,372 43,348
 Interest expense 6,457 8,161 21,624 26,384
 Other deductions (income) (636) 239 (1,046) 270
 Income from continuing operations
 before income taxes, extraordinary
 charge and
 accounting changes 1,650 9,842 12,794 16,694
 Income tax provision 2,157 4,077 6,498 6,805
 Income (loss) from continuing
 operations before extraordinary
 charge and accounting changes (507) 5,765 6,296 9,889
 Income (loss) from discontinued
 operations (820) 788 3,201 2,713
 Gain from disposition of
 discontinued operations 9,207 --- 9,207 ---
 Extraordinary charge-early
 retirement of debt --- --- --- (5,179)
 Cumulative effect of
 accounting changes --- --- (70,305) ---
 Net income (loss) 7,880 6,553 (51,601) 7,423
 Average primary shares
 outstanding 12,136 11,989 12,081 11,013
 Income (loss) from continuing
 operations before extraordinary
 charge and accounting changes (.04) .48 .52 .90
 Income (loss) from discontinued
 operations (.07) .07 .27 .24
 Gain from disposition of
 discontinued operations .76 --- .76 ---
 Extraordinary charge-early
 retirement of debt --- --- --- (.47)
 Cumulative effect of accounting
 changes --- --- (5.82) ---
 Primary earnings (loss) per
 share .65 .55 (4.27) .67
 Fully diluted earnings (loss)
 per share .60 .52 (a) (a)
 The condensed consolidated financial statements are unaudited but contain all adjustments necessary in the opinion of management for fair presentation. The results for interim periods necessarily reflect estimates for certain items, such as the valuation of the majority of inventories on a LIFO cost basis, which can only be finally determined at the end of the fiscal year.
 The adoption of FAS 106, "Employers' Accounting for Postretirement Benefits other than Pensions," resulted in a pretax charge of $35.1 million ($21.8 million after tax). The adoption of FAS 109, "Accounting for Income Taxes," reduced net income by $48.5 million. The new accounting standards were adopted effective Jan. 1, 1993, and the cumulative effect on prior years of the changes were charged to income in 1993.
 (a) Not presented as effects are anti-dilutive.
 Consolidated Statement of Financial Position
 Sept. 30,
 1993 1992
 Current assets:
 Cash $4,348 $9,536
 Accounts receivable 168,869 182,812
 Inventories 230,069 253,725
 Deferred tax assets --- 21,435
 Net assets of discontinued
 operations 10,705 ---
 Other prepaid expenses and
 current assets 4,709 8,617
 Total current assets 418,700 476,125
 Plant and equipment, net 291,596 371,354
 Deferred charges and other assets 27,162 31,434
 Total assets 737,458 878,913
 Current Liabilities:
 Short-term borrowings 17,879 23,481
 Accounts and drafts payable 49,876 59,701
 Federal and state income taxes 14,395 1,659
 Deferred income taxes 20,542 ---
 Accrued liabilities 67,194 72,706
 Current portion of long-term debt 9,699 10,447
 Total current liabilities 179,585 167,994
 Long-term debt 229,226 376,881
 Deferred income taxes 34,301 38,548
 Other non-current liabilities 58,168 19,021
 Shareowners' equity 236,178 276,469
 Total liabilities and
 shareowners' equity 737,458 878,913
 Consolidated statement of cash flows
 Nine Months
 Ended Sept. 30,
 1993 1992
 Cash flows from operating activities:
 Net income (loss) $(51,601) $7,423
 Cumulative effect of accounting
 changes 70,305 ---
 Extraordinary charge-early retirement
 of debt --- 5,179
 Depreciation and amortization 23,899 23,797
 Deferred income taxes (6,404) 1,890
 Income from discontinued operations (12,408) (2,713)
 Working capital and other (28,232) (15,263)
 Net cash provided by (used in)
 operating activities (4,441) 20,313
 Cash flows from investing activities:
 Additions to plant and equipment (7,328) (12,838)
 Proceeds from disposal of plant
 and equipment 10,565 3,458
 Proceeds from disposal of discontinued
 operations 139,167 ---
 Total cash provided by (used in)
 investing activities 142,404 (9,380)
 Net cash (used in) financing
 activities (120,875) (22,911)
 Cash provided by (used in) discontinued
 operations (17,405) 12,176
 Increase (decrease) in cash (317) 198
 Reconciliation of Primary Earnings Per Share
 Three months Nine months
 Periods ended Sept. 30, 1993 1992 1993 1992
 Income from continuing
 operations before
 non-recurring items $ .58 $ .48 $ 1.14 $ .90
 Restructuring charges for
 early retirement program (.50) -- (.50) --
 Increase in federal income
 tax rate (.12) -- (.12) --
 Income (loss) from continuing
 operations before extraordinary
 charge and accounting changes (.04) .48 .52 .90
 Income (loss) from discontinued
 operations (.07) .07 .27 .24
 Gain on disposition of
 discontinued operations .76 -- .76 --
 Income before extraordinary
 charge and cumulative effect
 of accounting changes .65 .55 1.55 1.14
 Extraordinary charge - early
 retirement of debt -- -- -- (.47)
 Cumulative effect of
 accounting changes -- -- (5.82) --
 Net income (loss) .65 .55 (4.27) .67
 -0- 10/20/93
 /CONTACT: K.W. Fraser, Jr., or T.R. Staab of Fieldcrest Cannon, 919-627-3253, or Paul Verbinnen or Anna Cordasco of Sard Verbinnen & Co., 212-687-8080/
 (FLD)


CO: Fieldcrest Cannon, Inc. ST: North Carolina IN: TEX SU: ERN

TW-LW -- NY047 -- 4573 10/20/93 12:24 EDT
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Date:Oct 20, 1993
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