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GALEY & LORD ANNOUNCES EARNINGS

 GREENSBORO, N.C., July 21 /PRNewswire/ -- Galey & Lord, Inc. (NASDAQ: GANL) today reported net sales of $102.4 million for the third quarter of fiscal 1993 (June quarter '93). This compares to net sales of $87.9 million for the same quarter a year ago. Net income for the June quarter '93 was $3.1 million versus $1.2 million for the same period in the prior year. The prior year period included an extraordinary loss on early extinguishment of debt of $1.7 million. Net income per common share for the June quarter '93 was $.26 versus a $.04 loss for the prior year. The prior year included the extraordinary charge for early extinguishment of debt of $.17 per share and an early redemption premium on preferred stock of $.14 per share. Calculations of earnings per share were based on 12.0 million common shares outstanding for the June quarter '93 versus 10.4 million for the prior year period.
 For the nine months ended July 3, 1993, net sales were $289.6 million as compared to $263.7 million for the first nine months of fiscal 1992. Net income for the nine-month period was $10.6 million versus $7.8 million for the same period last year. The prior year period included an extraordinary loss on extinguishment of debt of $1.7 million. Net income per common share for the nine-month period was $.88 compared to $.64 for the same period in the prior year. The prior year nine-month figure includes the extraordinary charge for the early extinguishment of debt and the early redemption premium on preferred stock. The nine-month calculations of earnings per share were based on 12.0 million common shares outstanding for the current year versus 8.8 million for the prior year nine-month period.
 The company reported that the increase in net sales for the June quarter '93 was due to a 16.3 percent increase in woven fabrics sales and the addition of synthetic fabric sales, partially offset by an 8.0 percent reduction in the sales of printed fabrics.
 The company reported that its gross margin percent for the third quarter of fiscal 1993 was 9.8 percent as compared to 10.7 percent in the third quarter of fiscal 1992. The primary reasons for this decline were lower sales and lower gross margins on sales of printed fabrics and some start-up costs related to new products.
 Wiener noted that the company's order backlog position was approximately $94 million at July 3, 1993, as compared to approximately $77 million a year ago. This 22 percent increase was due to extremely strong demand for the company's woven fabrics products and orders for the Synthetic Fabrics Division. Wiener also commented that on June 22, 1993, the company completed the refinancing of its term loan and revolving credit facilities, lowering the company's current interest rate on these debts by more than 1.5 percentage points. The revised term loan and revolving credit facilities reduce the rate of interest from the prime rate plus .5 percent to an option of either the prime rate or the LIBOR rate plus 1.5 percent. The revised agreements also increased the term loan borrowings by $15,800,000 to $45,000,000 and increased the maximum borrowings permitted under the revolving line of credit from $75,000,000 to $80,000,000. Borrowings outstanding against the revolving line of credit at 7/20/93 were approximately $51,799,000.
 Galey & Lord is a leading developer, manufacturer and marketer of high-quality woven cotton and cotton blended apparel fabrics. These fabrics are 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. The company added a batch-dyed synthetic fabrics business in September quarter 1992 which allows its customers to purchase coordinated prints and solids from the same source.
 GALEY & LORD, INC.
 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 (Amounts in thousands except per share data)
 Three Months Ended Nine Months Ended
 July 3, June 27, July 3, June 27,
 1993 1992 1993 1992
 Net sales $102,448 $87,879 $289,573 $263,709
 Cost of sales 92,380 78,471 257,426 231,470
 Gross profit 10,068 9,408 32,147 32,239
 Selling, general and
 administrative expenses 3,401 2,921 10,131 9,978
 Operating income before
 interest, other and income
 taxes 6,667 6,487 22,016 22,261
 Interest expense 1,732 2,141 5,144 7,972
 Income before income taxes 4,935 4,346 16,872 14,289
 Income tax expense
 Current 1,234 732 4,120 3,409
 Deferred 622 662 2,160 1,308
 1,856 1,394 6,280 4,717
 Income before extraordinary
 item 3,079 2,952 10,592 9,572
 Extraordinary loss on
 extinguishment of debt
 (Net of income tax benefit of
 $1,042) -- (1,729) -- (1,729)
 Net income $3,079 $1,223 $10,592 $7,843
 Net income $3,079 $1,223 $10,592 $7,843
 Accrued preferred dividends -- (108) -- (576)
 Accretion of preferred stock -- (17) -- (90)
 Early redemption premium on
 preferred stock -- (1,485) -- (1,485)
 Net income (loss) applicable to
 common stock $3,079 $(387) $10,592 $5,692
 Net income (loss) per common share:
 Primary:
 Average common shares
 outstanding 11,982 10,321 11,973 8,780
 Income per share before early
 redemption premium on preferred
 stock and extraordinary item $.26 $.27 $.88 $1.01
 Early redemption premium on
 preferred stock -- (.14) -- (.17)
 Income per share before
 extraordinary item $.26 $.13 $.88 $.84
 Extraordinary item -- (.17) -- (.20)
 Net income/(loss) per common
 share $.26 $(.04) $.88 $.64
 Fully Diluted:
 Average common shares
 outstanding 11,982 10,362 11,981 8,793
 Income per share before early
 redemption premium on
 preferred stock and
 extraordinary item $.26 $.27 $.88 $1.01
 Early redemption premium on
 preferred stock -- (.14) -- (.17)
 Income per share before
 extraordinary item $.26 $.13 $.88 $.84
 Extraordinary item -- (.17) -- (.20)
 Net income/(loss) per common
 share $.26 $(.04) $.88 $.64
 CONSOLIDATED BALANCE SHEETS
 (Amounts in thousands)
 July 3, June 27, Oct. 3,
 1993 1992 1992
 (Unaudited) (Unaudited) (A)
 ASSETS
 Current assets:
 Cash and cash equivalents $ 4,139 $2,909 $3,516
 Trade accounts receivable 68,937 57,039 55,328
 Sundry notes and accounts
 receivable 264 70 170
 Inventories 58,247 51,428 55,827
 Prepaid expenses and other
 current assets 605 484 870
 Total current assets 132,192 111,930 115,711
 Property, plant and equipment, at cost 90,594 80,679 82,476
 Less accumulated depreciation
 and amortization (32,689) (26,210) (27,994)
 57,905 54,469 54,482
 Deferred charges 640 422 522
 Intangibles 2,108 2,254 2,217
 $192,845 $169,075 $172,932
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Current portion of long-term debt $ 8,147 $ 8,768 $ 11,674
 Trade accounts payable 18,376 18,053 19,676
 Accrued salaries and employee benefits 5,389 7,482 7,662
 Accrued liabilities 1,197 2,201 1,801
 Income taxes payable 578 3,250 4,158
 Total current liabilities 33,687 39,754 44,971
 Commitments
 Long-term debt 98,328 86,369 80,286
 Other long-term liabilities 410 470 480
 Deferred income taxes 4,152 820 1,992
 Stockholders' equity:
 Common stock 116 115 115
 Contributed capital in excess
 of par value 32,920 32,444 32,448
 Retained earnings 23,299 9,170 12,707
 Treasury stock, at cost (67) (67) (67)
 Total stockholders' equity 56,268 41,662 45,203
 $192,845 $169,075 $172,932
 (A) Condensed from audited financial statements.
 CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
 (Amounts in thousands)
 Nine Months Ended
 July 3, June 27,
 1993 1992
 Cash flows from operating activities:
 Net income $ 10,592 $ 7,843
 Adjustments to reconcile net
 income to net cash provided
 by operating activities:
 Depreciation of property, plant
 and equipment 5,275 4,915
 Amortization of intangible assets 109 109
 Amortization of deferred charges 216 586
 Deferred income taxes 2,160 820
 (Gain)/loss on disposals of property,
 plant and equipment 158 89
 Write-off commitment fees & interest cap -- 1,155
 Loss on redemption of sub-debt -- 1,615
 Changes in assets and liabilities:
 (Increase)/decrease in accounts
 receivable - net (13,609) (3,486)
 (Increase)/decrease in sundry notes
 & accounts receivable (94) 51
 (Increase)/decrease in inventories (2,420) (5,153)
 (Increase)/decrease in prepaid expenses
 and other current assets 265 (178)
 (Decrease)/increase in accounts
 payable - trade (1,300) (3,586)
 (Decrease)/increase in accrued
 liabilities (2,877) (8)
 (Decrease)/increase in income taxes
 payable (3,580) 2,649
 Net cash provided (used) by
 operating activities (5,105) 7,421
 Cash flows from investing activities:
 Property, plant and equipment
 expenditures (9,296) (6,122)
 Equipment transferred to operating lease 389 847
 Proceeds from sale of property, plant
 and equipment 51 110
 Net cash provided (used) in
 investing activities (8,856) (5,165)
 Cash flows from financing activities:
 Increase/(decrease) in revolving
 line of credit 701 1,443
 Principal payments on long-term debt (4,915) (26,198)
 Redeem preferred stock -- (8,500)
 Pay accrued dividends -- (3,571)
 Increase/(decrease) in common stock 473 31,559
 Issuance of long-term debt 18,729 1,009
 Other (404) (257)
 Net cash provided (used) by
 financing activities 14,584 (4,515)
 Net increase/(decrease) in cash and
 cash equivalents 623 (2,259)
 Cash and cash equivalents at beginning
 of period 3,516 5,168
 Cash and cash equivalents at end
 of period $ 4,139 $ 2,909
 -0- 7/21/93
 /CONTACT: Arthur C. Wiener, Galey & Lord, 212-465-3000/
 (GANL)


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

CM -- CH001 -- 3737 07/21/93 08:08 EDT
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Date:Jul 21, 1993
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