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GALEY & LORD ANNOUNCES EARNINGS

 GALEY & LORD ANNOUNCES EARNINGS
 NEW YORK, July 27 /PRNewswire/ -- Galey & Lord, Inc. (NASDAQ: GANL)


today announced June Quarter '92 sales of $87.9 million, income before extraordinary items of $3.0 million and earnings per share before early redemption premium on preferred stock and extraordinary items of $.27 on a fully diluted basis.
 This compares to $87.1 million in sales, $647,000 in income before extraordinary items and $.05 per share for the same period in 1991. For the nine months ending in June, the company had sales of $263.7 million, income before extraordinary items of $9.6 million and earnings per share before extraordinary items of $.98 on a fully diluted basis. Comparable numbers for the same period a year ago were sales of $243.9 million, income before extraordinary items of $1.9 million and earnings per share of $.14.
 The improvement in June Quarter 1992 results was primarily due to improved margins and lower interest expense. The higher margins were a result of improved selling prices, the sale of more value-added woven fabrics, and improved plant operating efficiencies. These improvements were partly offset by a decline in the Print Fabrics Division's sales. For the nine months ending June '92, the improvement came from the same factors plus increased sales volume.
 The company completed its initial public offering on May 7. The proceeds were used to eliminate the company's 14 percent subordinated debt and to redeem all of its Senior Preferred Stock. On May 29, the company completed refinancing agreements on its term loan and revolver. As outlined in the Prospectus, 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 $.17 per share and a loss due to early redemption premium on preferred stock of $1.5 million or $.14 per share. Considering these factors, net income for June Quarter '92 was $1.2 million vs. $647,000 in the year ago quarter 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 a loss of $387,000 ($.04 loss per share) vs. a gain of $381,000 ($.05 per share) in the year ago period.
 Arthur Wiener, chairman and chief executive officer, stated that the June Quarter results were in line with the company's business plan. "The company is pleased that stronger than anticipated demand continues for its traditional woven fabrics." The company recently started a Synthetic Fabrics Division and Wiener added that the initial reception for this new division has been extremely favorable.
 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 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.
 GALEY & LORD, INC.
 Selected Operating Results (Unaudited)
 Amounts in Thousands, Except Per Share Data
 ACTUAL
 Three Months Three Months Nine Months Nine Months
 Ended Ended Ended Ended
 6/27/92 6/29/91 6/27/92 6/29/91
 Net sales $ 87,879 $ 87,103 $263,709 $243,945
 Income before
 extraordinary item $ 2,952 $ 647 $ 9,572 $ 1,876
 Extraordinary loss
 on early extinguishment
 of debt $ (1,729) $ -- $ (1,729) $ --
 Net income $ 1,223 $ 647 $ 7,843 $ 1,876
 Net income applicable
 to common stock
 before early
 redemption premium
 on preferred
 stock $ 1,098 $ 381 $ 7,177 $ 1,103
 Early redemption
 premium on
 preferred stock $ (1,485) $ -- $ (1,485) $ --
 Net income (loss)
 applicable to
 common stock $ (387) $ 381 $ 5,692 $ 1,103
 Net income (loss) per
 share - fully
 diluted basis:
 Average common shares
 outstanding 10,324 8,009 9,047 8,009
 Income per share before
 early redemption
 premium on preferred
 stock and extra-
 ordinary item $ .27 $ .05 $ .98 $ .14
 Early redemption
 premium on preferred
 stock $ (.14) $ -- $ (.16) $ --
 Extraordinary loss on
 early extinguishment
 of debt $ (.17) $ -- $ (.19) --
 Net income (loss) per
 common share $ (.04) $ .05 $ .63 $ .14
 GALEY & LORD, INC.
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Dollar amounts in thousands)
 June 27, 1992 Sept. 28, 1991
 ASSETS (Unaudited) (A)
 Current assets:
 Cash and cash equivalents $2,909 $5,168
 Trade accounts receivable 57,039 53,553
 Sundry notes and accounts
 receivable 70 121
 Inventories 51,428 46,275
 Prepaid expenses and other
 current assets 484 306
 Total current assets 111,930 105,423
 Property, plant and equipment,
 at cost 80,679 75,964
 Less accumulated depreciation
 and amortization (26,210) (21,656)
 54,469 54,308
 Deferred charges 422 1,867
 Intangibles 2,254 2,363
 169,075 163,961
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Current portion of long-term debt $8,768 $10,810
 Trade accounts payable 18,053 21,639
 Accrued salaries and employee
 benefits 7,482 6,135
 Accrued liabilities 2,201 3,556
 Income taxes payable 3,250 601
 Total current liabilities 39,754 42,741
 Commitments
 Long-term debt
 Related parties - 11,000
 Other 86,369 95,458
 Deferred income taxes 820 -
 Other long-term liabilities 470 431
 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 32,444 920
 Retained earnings 9,170 3,478
 Treasury stock, at cost (67) (67)
 Total stockholders' equity 41,662 4,411
 $169,075 $163,961
 (A) Condensed from audited financial statements
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 (Amounts in thousands except per share data)
 Three Months Ended Nine Months Ended
 June 27, June 29, June 27, June 29,
 1992 1991 1992 1991
 Net sales $87,879 $87,103 $263,709 $243,945
 Cost of sales 78,471 79,907 231,470 221,762
 Gross Profit 9,408 7,196 32,239 22,183
 Selling, general and
 administrative expenses 2,921 2,830 9,978 8,602
 Operating income before
 interest, other and income
 taxes 6,487 4,366 22,261 13,581
 Interest expense 2,141 3,529 7,972 11,137
 Income before income taxes 4,346 837 14,289 2,444
 Income tax expense
 Current 732 190 3,409 567
 Deferred 662 0 1,308 1
 1,394 190 4,717 568
 Income before extraordinary
 item 2,952 647 9,572 1,876
 Extraordinary loss on
 extinguishment of debt
 (Net of income tax benefit
 of $1,042) (1,729) - (1,729) -
 Net income $1,223 $ 647 $7,843 $1,876
 Net income $1,223 $ 647 $7,843 $1,876
 Accrued preferred dividends (108) (232) (576) (673)
 Accretion of preferred stock (17) (34) (90) (100)
 Early redemption premium on
 preferred stock (1,485) - (1,485) -
 Net income (loss) applicable
 to common stock $ (387) $ 381 $ 5,692 $1,103
 Net income (loss) per
 common share:
 Primary:
 Average common shares
 outstanding 10,281 8,009 8,877 8,009
 Income per share before
 early redemption premium
 on preferred stock and
 extraordinary item $.27 $.05 $1.00 $.14
 Early redemption premium
 on preferred stock (.14) - (.17) -
 Income per share before
 extraordinary item $.13 $.05 $.83 $.14
 Extraordinary item (.17) - (.19) -
 Net income/(loss) per
 common share $(.04) $.05 $.64 $.14
 Fully Diluted:
 Average common shares
 outstanding 10,324 8,009 9,047 8,009
 Income per share before
 early redemption premium
 on preferred stock and
 extraordinary item $.27 $.05 $.98 $.14
 Early redemption premium on
 preferred stock (.14) - (.16) -
 Income per share before
 extraordinary item $.13 $.05 $.82 $.14
 Extraordinary item (.17) - (.19) -
 Net income/(loss) per
 common share $(.04) $.05 $.63 $.14
 -0- 7/27/92
 /CONTACT; Arthur C. Wiener, Galey & Lord, Inc., 212-465-3000/
 (GANL) CO: Galey & Lord, Inc. ST: North Carolina IN: TEX SU: ERN


CM -- CH001 -- 3369 07/27/92 09:22 EDT
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Date:Jul 27, 1992
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