Greensboro, NC, Nov. 21--Burlington Industries completed its fiscal year on September 28. For the fourth quarter, the company reported after tax earnings of $36.1 million, which was significantly impacted by pre-tax restructuring and reorganization charges of $21.1 million and an income tax benefit of $62.4 million.
For the year, the company reported a net loss of $100.8 million. Major components of that loss were pre-tax charges of $186.8 million for restructuring and reorganization expense, which were partially offset by $146.5 million in tax benefits.
Net sales for the fourth quarter were $220.9 million. Net sales for the year 2002 were $993.3 million. Revenue figures for both periods reflect actions taken as part of the company's comprehensive restructuring plan. These actions include substantial reductions in fabric manufacturing capacity and the sale of the consumer home furnishings and residential upholstery businesses.
The company has said its capacity reductions and divestitures have been a key component in the company's strategy to exit underperforming business lines and improve its cost structure. Through these actions, the company has achieved higher capacity utilization and an improved product mix.
The company said it has exceeded its key financial objectives. It noted that a number of factors exist, most of which are related to the restructuring and reorganization, that make comparisons with the prior year difficult.
During the year the company reduced apparel fabrics capacity by more than 50%. Throughout the process of winding down operations at certain plants, in addition to the reported restructuring charges, the company also incurred substantial expenses related to the underutilization of capacity and the closing of those facilities. These expenses are included in the cost of sales, reducing reported gross margin.
Interior furnishings fabric capacity was significantly reduced and the consumer products and upholstery fabrics businesses were sold.
The company recorded an income tax benefit of $146.5 million for the year, received tax refunds of $35.8 million in cash, and expects to receive additional tax refunds totaling $67.6 million in the first half of fiscal 2003.
The company has also made significant improvements to its balance sheet during the year. At year end, net debt (total debt minus cash) was $173.3 million lower than a year ago. Liquidity remains excellent: the company has a $100 million credit line that is fully available for borrowings or letters of credit. Cash and cash equivalents totaled $151.5 million at year end, compared to $87.5 million a year ago.
George W. Henderson, III, chairman and CEO said, "I am pleased to report that we have made substantial progress on the operational restructuring program that we outlined last January. Through the exceptional efforts of our employees and with the support of our customers and suppliers, we have accomplished a great deal in the past 12 months. We believe that we are on track to emerge from Chapter 11 in mid-2003.²
