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GALEY & LORD, INC. REPORTS FOURTH QUARTER RESULTS

 GREENSBORO, N.C., Nov. 5 /PRNewswire/ -- Galey & Lord, Inc. (NASDAQ: GANL) today reported for the fourth quarter ended October 2, 1993 (13 weeks) net sales of $96.3 million, net income of $2.8 million and earnings per share of $.24 on a fully-diluted basis. This compares to September quarter 1992 (14 weeks) sales of $89.1 million, net income of $3.5 million and earnings per share of $.30 on a fully-diluted basis.
 Net sales in September quarter 1993 were 8.1 percent higher than the same period in 1992. Sales of woven and synthetic fabrics were up 9.3 percent partially offset by a 4.4 percent reduction in the sales of printed fabrics. Although sales were higher, net income was $700 thousand or $.06 per share lower primarily due to certain manufacturing inefficiencies associated with adapting to an increased volume of more difficult value-added styling, due to lower volume and gross margins on printed fabrics and due to increased bad debt expense partially offset by lower interest expense.
 Fiscal 1993 (52 weeks) sales were $385.8 million, net income was $13.4 million and earnings per share was $1.12. Comparable numbers for fiscal 1992 (53 weeks) were sales of $352.8 million, net income of $11.4 million and earnings per share of $.96. Fiscal 1992 net income included an extraordinary loss on early extinguishment of debt of $1.7 million ($.18 per share). Earnings per share included the extraordinary loss on early extinguishment of debt and an early redemption premium on preferred stock of $1.5 milion ($.16 per share). Calculations of earnings per share were based on 12.0 million shares for fiscal 1993 versus 9.6 million shares for fiscal 1992. The fiscal 1992 shares were lower because the initial public offering was completed on April 30, 1992 and, therefore, only partially effected average shares outstanding for fiscal year 1992.
 Fiscal 1993 sales were 9.4 percent higher than fiscal 1992 due to a 15.0 percent increase in the sales of woven and synthetic fabrics partially offset by a 24.7 percent decrease in the sales of printed fabrics.
 Net income improved $2.0 million for fiscal 1993 as compared to fiscal 1992 primarily due to a $3.2 million reduction in interest expense and due to a $1.7 million extraordinary loss on the retirement of debt that occurred in 1992, partiallly offset by $1.7 million lower operating income and $1.2 million higher income tax expense in 1993. The $3.2 million improvement in interest expense was due to the repayment of debt with the proceeds from the 4/30/92 public offering and due to refinancings done by the Company in May 1992 and June 1993. Improvement was also due to lower LIBOR and prime rates on which the Company's borrowing rates are based. Operating income was $1.7 million lower in fiscal 1993 than in fiscal 1992 primarily due to the 24.7 percent reduction in prints' sales volume, which resulted in negative operating income for prints partially offset by the 15.0 percent increase in woven and synthetic sales which resulted in improved operating income. The $1.2 million higher income taxes resulted from higher net income and an increase in the Company's effective federal tax rate.
 The Company's order backlog was approximately $88 million at 10/2/93 or approximately 4 percent higher than the $85 million backlog at 10/3/92.
 Galey & Lord is a leading developer, manufacturer and marketer of high-quality woven cotton and cotton blended apparel fabrics. These fabrics are sold principaly to well-known manufacturers of sportswear 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. The Company added a batch-dyed synthetic fabric business in September quarter 1992, which allows its customers to purchase coordinated prints and solids from the same source.
 GALEY & LORD, INC.
 CONSOLIDATED BALANCE SHEETS
 (Amounts in thousands)
 Oct. 2, Oct. 3,
 1993 1992
 ASSETS
 Current assets:
 Cash and cash equivalents $2,742 $3,516
 Trade accounts receivable 71,282 55,328
 Sundry notes and accounts receivable 143 170
 Inventories 66,275 55,827
 Prepaid expenses and other current assets 532 870
 Total current assets 140,974 115,711
 Property, plant and equipment, at cost 92,734 82,476
 Less accumulated depreciation and
 amortization (34,065) (27,994)
 58,669 54,482
 Deferred charges 635 522
 Intangibles 2,072 2,217
 $202,350 $172,932
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Current portion of long-term debt $9,098 $11,674
 Trade accounts payable 24,100 19,676
 Accrued salaries and employee benefits 6,965 7,662
 Accrued liabilities 1,593 1,801
 Income taxes payable 412 4,158
 Total current liabilities 42,168 44,971
 Commitments
 Long-term debt 95,223 80,286
 Other long-term liabilities 344 480
 Deferred income taxes 5,548 1,992
 Stockholders' equity:
 Common stock 116 115
 Contributed capital in excess of par value 32,900 32,448
 Retained earnings 26,118 12,707
 Treasury stock, at cost (67) (67)
 Total stockholders' equity 59,067 45,203
 $202,350 $172,932
 CONSOLIDATED STATEMENTS OF INCOME
 (Amounts in thousands except per share data)
 3 Months Ended 12 Months Ended
 Oct. 2, Oct. 3, Oct. 2, Oct. 3,
 1993 1992 1993 1992
 Net sales $96,269 $89,056 $385,841 $352,765
 Cost of sales 86,582 78,241 344,007 309,711
 Gross profit 9,687 10,815 41,834 43,054
 Selling, general and
 administrative expenses 3,813 3,530 13,944 13,508
 Operating income before interest
 and income taxes 5,874 7,285 27,890 29,546
 Interest expense 1,321 1,681 6,465 9,653
 Income before income taxes 4,553 5,604 21,425 19,893
 Income tax expense
 Current 339 895 4,459 4,304
 Deferred 1,395 1,172 3,555 2,480
 1,734 2,067 8,014 6,784
 Income before extraordinary item 2,819 3,537 13,411 13,109
 Extraordinary loss on
 extinguishment of debt (Net of
 income tax benefit of $1,042) - - - (1,729)
 Net income $2,819 $3,537 $13,411 $11,380
 Net income $2,819 $3,537 $13,411 $11,380
 Accrued preferred dividends - - - (576)
 Accretion of preferred stock - - - (90)
 Early redemption premium on
 preferred stock - - - (1,485)
 Net income applicable
 to common stock $2,819 $3,537 $13,411 $9,229
 Net income per common share:
 Primary:
 Average common
 shares outstanding 11,939 11,920 11,965 9,564
 Income per share before early
 redemption premium on preferred
 stock and extraordinary item $.24 $.30 $1.12 $1.30
 Early redemption premium on
 preferred stock - - - (.16)
 Income per share before
 extraordinary item $.24 $.30 $1.12 $1.14
 Extraordinary item - - - (.18)
 Net income per common share $.24 $.30 $1.12 $.96
 Fully Diluted:
 Average common shares outstanding 11,939 11,920 11,972 9,575
 Income per share before early
 redemption premium on preferred
 stock and extraordinary item $.24 $.30 $1.12 $1.30
 Early redemption premium on
 preferred stock - - - (.16)
 Income per share before
 extraordinary item $.24 $.30 $1.12 $1.14
 Extraordinary item - - - (.18)
 Net income per common share $.24 $.30 $1.12 $.96
 CONSOLIDATED STATEMENT OF CASH FLOWS
 (Amounts in thousands)
 Twelve Months Ended
 Oct. 2, Oct. 3,
 1993 1992
 Cash flows from operating activities:
 Net income $13,411 $11,380
 Adjustments to reconcile net income to net
 cash provided by operating activities:
 Depreciation of property, plant and equipment 6,862 6,602
 Amortization of intangible assets 145 146
 Amortization of deferred charges 288 665
 Deferred income taxes 3,556 1,992
 (Gain)/loss on disposals of property, plant
 and equipment 242 335
 Loss on extinguishment of debt -- 2,770
 Changes in assets and liabilities:
 (Increase)/decrease in accounts
 receivable -- net (15,954) (1,775)
 (Increase)/decrease in sundry notes &
 accounts receivable 27 (49)
 (Increase)/decrease in inventories (10,448) (9,552)
 (Increase)/decrease in prepaid expenses
 and other current assets 338 (564)
 (Decrease)/increase in accounts
 payable -- trade 4,424 (1,963)
 (Decrease)/increase in accrued liabilities (905) (228)
 (Decrease)/increase in income taxes payable (3,746) 3,557
 Net cash provided (used) by operating activities (1,760) 13,316
 Cash flows from investing activities:
 Property, plant and equipment expenditures (11,736) (8,074)
 Equipment transferred to operating lease 389 847
 Proceeds from sale of property, plant
 and equipment 56 116
 Net cash provided (used) in investing activities (11,291) (7,111)
 Cash flows from financing activities:
 Increase/(decrease) in revolving line of credit 1,409 2,268
 Principal payments on long-term debt (7,809) (10,585)
 Redemption of Senior Subordinated Notes -- (14,170)
 Redemption of Senior Preferred Stock -- (8,500)
 Payments of dividends on Senior Preferred Stock -- (3,571)
 Increase/(decrease) in common stock 453 26,118
 Issuance of long-term debt 18,761 1,009
 Other (537) (426)
 Net cash provided (used) by financing activities 12,277 (7,857)
 Net increase/(decrease) in cash and cash equivalents (774) (1,652)
 Cash and cash equivalents at beginning of period 3,516 5,168
 Cash and cash equivalents at end of period $2,742 $3,516
 -0- 11/5/93
 /CONTACT: Arthur C. Wiener, Galey & Lord, 212-465-3000/
 (GANL)


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

JM-SB -- CH001 -- 1080 11/05/93 08:00 EST
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