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GALEY & LORD ANNOUNCES SECOND QUARTER RESULTS

 GREENSBORO, N.C., April 21 /PRNewswire/ -- Galey & Lord, Inc. (NASDAQ: GANL) today reported record quarterly net sales of $102.4 million for the second quarter of fiscal 1993 (March quarter '93). This compares to net sales of $86.7 million for the same quarter a year ago. Net income applicable to common stock was $3.5 million versus $2.7 million, or a 29.4 percent increase versus the prior year. Net income per common share was $.29 versus $.34 for the second quarter of 1992. Calculations of earnings per share were based on 12.0 million common shares outstanding for the current year versus 8.0 million for the prior year.
 For the six months ended April 3, 1993, net sales were $187.1 million as compared to $175.8 million for the first six months of fiscal 1992. Net income applicable to common stock for the six-month period was $7.5 million, a 23.6 percent increase over the prior year level of $6.1 million. Net income per common share for the six-month period was $.63 based on 12.0 million outstanding shares versus $.76 based on 8.0 million outstanding shares a year ago.
 The company reported that the increase in net sales for the quarter and for the six months was due to a significant increase in sales of woven fabrics and the addition of sales for the new Synthetic Fabrics Division. These increases were partially offset by lower sales of printed fabrics. The increase in net income applicable to common stock was due to the higher woven fabrics sales, an improved product mix in woven fabrics and lower interest expense. These improvements were partially offset by lower printed fabrics sales.
 The company reported that its gross margin percent for the second quarter of fiscal 1993 was 10.5 percent as compared to 12.2 percent in the second quarter of fiscal 1992. The primary reasons for this decline were lower sales and lower gross margins on sales of printed fabrics, the unplanned curtailment of the company's manufacturing plants due to the "Blizzard of 1993" and higher manufacturing costs associated with the company's sportswear fabrics volume increasing earlier than expected. This increase in volume resulted in lower productivity and excess off quality as training had to be accelerated to meet the higher demand. Arthur Wiener, chairman and chief executive officer, commented that manufacturing is adjusting to the increased volume and that the company expects to see improvement in the June quarter.
 Wiener noted that the company's order backlog position was approximately $87 million at April 3, 1993 as compared to approximately $74 million a year ago. This 18 percent increase was due to extremely strong demand for the company's woven fabrics products and orders for the new Synthetic Fabrics Division. Orders for printed fabrics continue to lag behind last year.
 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.
 Selected Operating Results
 Amounts in Thousands, Except Per Share Data
 ACTUAL
 Three Month Ended Six Months Ended
 April 3, March 28, April 3, March 28,
 1993 1992 1993 1992
 Net Sales $102,417 $86,684 $187,125 $175,830
 Net Income $3,480 $2,967 $7,513 $6,620
 Net income applicable to
 common stock $3,480 $2,690 $7,513 $6,079
 Net income per share-
 Fully diluted basis:
 Average common shares
 outstanding 11,979 8,009 11,985 8,009
 Net income per common share $0.29 $0.34 $0.63 $0.76
 GALEY & LORD, INC.
 CONSOLIDATED BALANCE SHEETS
 (Amounts in thousands)
 115,711
 Property, plant and
 equipment, at cost 88,024 79,861 82,476
 Less accumulated depreciation
 and amortization (31,177) (24,840) (27,994)
 56,847 55,021 54,482
 Deferred charges 622 1,573 522
 Intangibles 2,145 2,290 2,217
 $189,997 $171,349 $172,932
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Current portion of
 long-term debt $ 9,082 $ 9,128 $ 11,674
 Trade accounts payable 19,728 19,245 19,676
 Accrued salaries and
 employee benefits 6,446 8,226 7,662
 Accrued liabilities 907 2,818 1,801
 Income taxes payable 656 3,135 4,158
 Total current liabilities 36,819 42,552 44,971
 Commitments
 Long-term debt
 Related parties -- 11,000 --
 Other 96,417 95,743 80,286
 Other long-term liabilities 500 457 480
 Deferred income taxes 3,530 646 1,992
 Accrued dividends - Senior
 Preferred Stock -- 3,463 --
 Senior Preferred Stock at
 carrying value -- 6,998 --
 Stockholders' equity:
 Common stock 115 80 115
 Contributed capital in
 excess of pa2,731 10,490 45,203
 $189,997 $171,349 $172,932
 (A) Condensed from audited financial statements.
 GALEY & LORD, INC.
 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 (Amounts in thousands, except per share data)
 Three Months Ended Six Months Ended
 April 3, March 28, April 3, March 28,
 1993 1992 1993 1992
 Net sales $102,417 $86,684 $187,125 $175,830
 Cost of sales 91,6 ? 76,110 165,046 152,999
 Gross profit 10,756 10,574 22,079 22,831
 Selling, general and
 administrative expenses 3,412 3,435 6,730 7,057
 Operating income before interest,
 other and income taxes 7,344 7,139 15,349 15,774
 Interest expense 1,769 2,778 3,412 5,831
 Income before income taxes 5,575 4,361 11,937 9,943
 Income tax expense:
 Current 1,384 1,175 2,886 2,677
 Deferred 711 219 1,538 646
 2,095 1,394 4,424 3,323
 Net income $3,480 $2,967 $7,513 $6,620
 Accrued preferred dividends -- (240) -- (468)
 Accretion of preferred stock -- (37) -- (73)
 Net income applicable
 to common stock $3,480 $2,690 $7,513 $6,079
 Net income per common share:
 Primary:
 Average common shares
 outstanding 11,979 8,009 11,969 8,009
 Net income per common
 share-Primary $ .29 $ .34 $ .63 $ .76
 Fully Diluted:
 Average common shares
 outstanding 11,979 8,009 11,985 8,009
 Net income per common
 share-Fully Diluted $ .29 $ .34 $ .63 $ .76
 GALEY & LORD, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 (Amounts in thousands)
 Six Months Ended
 April 3, March 28,
 1993 1992
 Cash flows from operating activities:
 Net income $ 7,513 $ 6,620
 Adjustments to reconcile net income
 to net cash provided by operating
 activities:
 Depreciation of property, plant,
 and equipment 3,510 3,262
 Amortization of intangible assets 72 73
 Amortization of deferred charges 148 419
 Deferred income taxes 1,538 646
 (Gain)/loss on disposals of property,
 plant and equipment 51 77
 Changes in assets and liabilities:
 (Increase)/decrease in accounts
 receivable-net (11,735) (3,403)
 (Increase)/decrease in sundry
 notes & accounts receivable 40 25
 (Increase)/decrease in inventories (3,087) (7,901)
 (Increase)/decrease in prepaid
 expenses and other current assets 409 (62)
 (Decrease)/increase in accounts
 payable-trade 52 (2,394)
 (Decrease)/increase in accrued
 liabilities (2,110) 1,353
 (Decrease)/increase in income
 taxes payable (3,502) 2,534
 Net cash provided (used) by operating
 activities (7,101) 1,249
 Cash flows from investing activities:
 Property, plant and equipment
 expenditures (6,366) (4,055)
 Equipment transferred to operating
 lease 389 --
 Proceeeds from sale of property, plant
 and equipment 51 3
 Net cash provided (used) in investing
 activities (5,926) (4,052)
 Cash flows from financing activities:
 Increase/(decrease) in revolving
 line of credit 15,989 2,870
 Principal payments on long-term debt (4,414) (4,267)
 Issuance of long-term debt 1,964 --
 Other (213) (99)
 Net cash provided (used) in financing
 activities 13,326 (1,496)
 Net increase/(decrease) in cash and
 cash equivalents 299 (4,299)
 Cash and cash equivalents at beginning
 of period 3,516 5,168
 Cash and cash equivalents at end
 of period $ 3,815 $ 869
 -0- 4/21/93
 /CONTACT: Arthur C. Wiener, Galey & Lord, Inc., 212-465-3000/
 (GANL)


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

SB-MM -- CH001 -- 8492 04/21/93 08:39 EDT
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