WestPoint Stevens Reports Fourth Quarter 2003 Results WEST POINT,
Ga., Feb. 20 /PRNewswire-FirstCall/ -- WestPoint Stevens Inc.
(BULLETIN BOARD: WSPT) (http://www.westpointstevens.com/) today
reported results for the fourth quarter ended December 31, 2003.
The Company's net sales for the fourth quarter of 2003 decreased 2%
to $456.1 million compared with $466.2 million a year ago. Sales
declined primarily from a reduction in the Company's mill store
sales as a result of restructuring initiatives that have reduced
the total number of retail stores to 38 from 57 in the year ago
period. Furthermore, the results for one of the Company's foreign
subsidiaries, WestPoint Stevens (Europe) Ltd., are not included in
the fourth quarter of 2003 as this subsidiary filed for bankruptcy
in the United Kingdom in August of 2003 and is in the process of
liquidating. Net income for the fourth quarter of 2003 was a loss
of $31.5 million or $0.63 per diluted share compared with a net
loss of $0.1 million or$0.00 per diluted share in 2002. Loss before
taxes for the fourth quarter of 2003 was $45.4 million compared
with a loss before taxes in 2002 of $0.1 million. Included in the
fourth quarter of 2003 were $37.5 million in expenses related to
the Company's restructuring initiatives, and $12.5 million in
expenses related to the current bankruptcy proceedings compared
with $2.2 million in expenses in the fourth quarter of 2002 related
to WestPoint Stevens previously announced restructuring
initiatives. M. L. "Chip" Fontenot, WestPoint Stevens President and
CEO commented, "The fourth quarter saw continued improvement in the
retail environment. Against this backdrop we are maintaining the
high service levels that our customers expect from West Point
Stevens and remain adequately funded with availability under our
$300 million debtor-in-possession facility of $154 million at the
end of the fourth quarter." Mr. Fontenot continued, "The Company is
continuing to move forward on a consensual basis with negotiating
new terms for a Chapter 11 plan of reorganization with all its
major creditor constituencies." For 2003, annual sales decreased
9.1% to $1,646.2 million versus $1,811.4 million in 2002. Loss
before taxes for 2003 was $194.6 million compared with a loss
before taxes in 2002 of $19.8 million. Included in the 2003 period
were a $46.3 million charge for goodwill impairment, $67.1 million
in expenses related to WestPoint Stevens previously announced
restructuring initiatives, and $31.5 million in expenses related to
the current bankruptcy proceedings. Included in the loss in the
2002 period was $18.2 million in expenses for restructuring
initiatives. Net income for 2003 was a loss of $133.3 million
versus a loss of $12.7 million for 2002. In addition to the items
above, the decline reflects the impact of lower sales, increased
raw material costs, increased royalties, increased pension expense,
and under-absorbed overhead due to production curtailment. Fully
diluted earnings per share increased to a loss of $2.67 in 2003
after charges associated with recent restructuring initiatives
versus a loss after charges in 2002 of $0.25. WestPoint Stevens
Inc. is the nation's premier home fashions consumer products
marketing company, with a widerange of bed linens, towels,
blankets, comforters and accessories marketed under the well-known
brand names GRAND PATRICIAN, PATRICIAN, MARTEX, ATELIER MARTEX,
BABY MARTEX, UTICA, STEVENS, LADY PEPPERELL, SEDUCTION, VELLUX and
CHATHAM - all registered trademarks owned by WestPoint Stevens Inc.
and its subsidiaries - and under licensed brands including RALPH
LAUREN HOME, DISNEY HOME, GLYNDA TURLEY and SIMMONS BEAUTYREST.
WestPoint Stevens is also a manufacturer of the MARTHA STEWART and
JOE BOXER bed and bath lines. WestPoint Stevens can be found on the
World Wide Web at http://www.westpointstevens.com/. Safe Harbor
Statement: Except for historical information contained herein,
certain matters set forth in this press release are
"forward-looking statements" within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve certain risks and uncertainties that could cause
actual results to differ materially from those in the
forward-looking statements. Such risks and uncertainties may be
attributable to important factors that include but are not limited
to the following: Product margins may vary from those projected;
Raw material prices may vary from those assumed; Additional
reserves may be required for bad debts, returns, allowances,
governmental compliance costs, or litigation; There may be changes
in the performance of financial markets or fluctuations in foreign
currency exchange rates; Unanticipated natural disasters could have
a material impact upon results of operations; There may be changes
in the general economic conditions that affect customer practices
or consumer spending; Competition for retail and wholesale
customers, pricing and transportation of products may vary from
time to time due to seasonal variations or otherwise; Customer
preferences for our products can be affected by competition, or
general market demand for domestic or imported goods or the
quantity, quality, price or delivery time of such goods; There
could be an unanticipated loss of a material customer or a material
license; The availability and price of raw materials could be
affected by weather, disease, energy costs or other factors; The
future results of operations may be adversely affected by factors
relating to the Chapter 11 proceedings. The information contained
in this release is as of February 20, 2004. WestPoint Stevens
assumes no obligation to update publicly any forward-looking
statements, contained in this document as a result of new
information or future events or developments. WESTPOINT STEVENS
INC. Condensed Consolidated Statements of Income (In thousands,
except per share data) Three Months Ended December 31, 2003
ProForma Restructuring Before And Other Restructuring Items Actual
Net sales $456,084 $- $456,084 Cost of goods sold 380,736 2,162
382,898 Gross earnings (loss) 75,348 (2,162) 73,186 Selling,
general and administrative expenses 48,202 - 48,202 Restructuring
and impairment charge - 35,322 35,322 Goodwill impairment charge -
- - Operating earnings (loss) 27,146 (37,484) (10,338) Interest
expense 19,132 - 19,132 Other expense-net 3,381 - 3,381 Chapter 11
expenses 12,528 - 12,528 Income (loss) before income tax expense
(benefit) (7,895) (37,484) (45,379) Income tax expense (benefit)
(355) (13,495) (13,850) Net income (loss) $(7,540) $(23,989)
$(31,529) Basic net income (loss) per common share $(0.15) $(0.63)
Diluted net income (loss) per common share $(0.15) $(0.63) Basic
average common shares outstanding 49,897 49,897 Dilutive effect of
stock options and stock bonus plan - - Diluted average common
shares outstanding 49,897 49,897 Three Months Ended December 31,
2002 ProForma Restructuring Before And Other Restructuring Items
Actual Net sales $466,187 $- $466,187 Cost of goods sold 368,571
1,395 369,966 Gross earnings (loss) 97,616 (1,395) 96,221 Selling,
general and administrative expenses 59,535 - 59,535 Restructuring
and impairment charge - 762 762 Goodwill impairment charge - - -
Operating earnings (loss) 38,081 (2,157) 35,924 Interest expense
35,026 - 35,026 Other expense-net 994 - 994 Chapter 11 expenses - -
- Income (loss) before income tax expense (benefit) 2,061 (2,157)
(96) Income tax expense (benefit) 742 (777) (35) Net income (loss)
$1,319 $(1,380) $(61) Basic net income (loss) per common share
$0.03 $- Diluted net income (loss) per common share $0.03 $- Basic
average common shares outstanding 49,681 49,681 Dilutive effect of
stock options and stock bonus plan - - Diluted average common
shares outstanding 49,681 49,681 WESTPOINT STEVENS INC. Condensed
Consolidated Statements of Income (In thousands, except per share
data) Twelve Months Ended December 31, 2003 ProForma Restructuring
Before And Other Restructuring Items Actual Net sales $1,646,202 $-
$1,646,202 Cost of goods sold 1,344,883 17,442 1,362,325 Gross
earnings (loss) 301,319 (17,442) 283,877 Selling, general and
administrative expenses 231,536 - 231,536 Restructuring and
impairment charge - 49,613 49,613 Goodwill impairment charge 46,298
- 46,298 Operating earnings (loss) 23,485 (67,055) (43,570)
Interest expense 101,972 - 101,972 Other expense-net 17,606 -
17,606 Chapter 11expenses 31,481 - 31,481 Income (loss) before
income tax expense (benefit) (127,574) (67,055) (194,629) Income
tax expense (benefit) (37,205) (24,140) (61,345) Net income (loss)
$(90,369) $(42,915) $(133,284) Basic net income (loss) per common
share $(1.81) $(2.67) Diluted net income (loss) per common share
$(1.81) $(2.67) Basic average common shares outstanding 49,886
49,886 Dilutive effect of stock options and stock bonus plan - -
Diluted average common shares outstanding 49,886 49,886 Twelve
Months Ended December 31, 2002 ProForma Restructuring Before And
Other Restructuring Items Actual Net sales $1,811,357 $- $1,811,357
Cost of goods sold 1,406,190 11,594 1,417,784 Gross earnings (loss)
405,167 (11,594) 393,573 Selling, general and administrative
expenses 264,650 - 264,650 Restructuring and impairment charge -
6,634 6,634 Goodwill impairment charge - - - Operating earnings
(loss) 140,517 (18,228) 122,289 Interest expense 135,476 - 135,476
Other expense-net 6,592 - 6,592 Chapter 11 expenses - - - Income
(loss) before income taxexpense (benefit) (1,551) (18,228) (19,779)
Income tax expense (benefit) (558) (6,562) (7,120) Net income
(loss) $(993) $(11,666) $(12,659) Basic net income (loss) per
common share $(0.02) $(0.25) Diluted net income (loss) per common
share $(0.02) $(0.25) Basic average common shares outstanding
49,667 49,667 Dilutive effect of stock options and stock bonus plan
- - Diluted average common shares outstanding 49,667 49,667
WESTPOINT STEVENS INC. Condensed Consolidated Balance Sheets (In
thousands) December 31, December 31, 2003 2002 Assets Current
Assets Cash and cash equivalents $3,660 $1,096 Accounts receivable
243,507 107,751 Inventories 368,620 368,743 Prepaid expenses and
other current assets 32,996 33,111 Total current assets 648,783
510,701 Property, Plant and Equipment, net 616,422 711,189 Other
Assets Deferred financing fees 12,837 25,883 Other assets 1,737
3,134 Goodwill - 46,298 $1,279,779 $1,297,205 Liabilities and
Stockholders' Equity (Deficit) Current Liabilities Senior Credit
Facility $490,689 $447,795 DIP Credit Agreement 89,017 - Long-term
debt classified as current 165,000 1,165,000 Accrued interest
payable 295 3,949 Accounts payable 56,198 57,357 Pension and other
accrued liabilities 111,731 110,073 Total current liabilities
912,930 1,784,174 Noncurrent Liabilities Deferred income taxes
87,179 158,244 Pension and other liabilities 141,936 160,434 Total
noncurrent liabilities 229,115 318,678 Liabilities Subject to
Compromise 1,086,869 - Stockholders' Equity (Deficit) (949,135)
(805,647) $1,279,779 $1,297,205 WESTPOINT STEVENS INC. Condensed
Consolidated Statements of Cash Flows (In thousands) Twelve Months
Ended December 31, 2003 2002 Cash flows from operating activities:
Net loss $(133,284) $(12,659) Adjustments to reconcile net loss to
net cash provided by (used for) operating activities: Depreciation
and other amortization 69,411 79,225 Deferred income taxes (61,459)
(979) Changes in working capital 80,723 18,667 Other-net 3,005
10,940 Non-cash component of restructuring and impairment charge
43,957 4,445 Goodwill impairment charge 46,298 - Net cash provided
by operating activities 48,651 99,639 Cash flows from investing
activities: Capital expenditures (18,679) (46,231) Net proceeds
from sale of assets 631 2,024 Net cash used for investing
activities (18,048) (44,207) Cash flows from financing activities:
Senior Credit Facility: Borrowings 720,333 794,581 Repayments
(677,439) (854,287) DIP Credit Agreement: Borrowings 513,460 -
Repayments (424,443) - Fees associated with DIP Credit Agreement
(5,150) - Trade Receivables Program (154,800) 2,200 Net cash used
for financing activities (28,039) (57,506) Net increase (decrease)
in cash and cash equivalents 2,564 (2,074) Cash and cash
equivalents at beginning of period 1,096 3,170 Cash and cash
equivalents at end of period $3,660 $1,096 Contact: Lorraine D.
Miller, CFA Senior Vice President - Finance and External
Communications 404.378.0491 DATASOURCE: WestPoint Stevens CONTACT:
Lorraine D. Miller, CFA, Senior Vice President - Finance and
External Communications of WestPoint Stevens, +1-404-378-0491 Web
site: http://www.westpointstevens.com/
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