Ch. 11 possible for Guilford Mills
By Susan M. Andrews -- Furniture Today, January 20, 2002
GREENSBORO, N.C — Guilford Mills last week reported a $160.7 million loss on sales of $643.5 million for the fiscal year ended Sept. 30, and said a Chapter 11 filing was a possibility.
The fabric supplier said it was unable to make loan payments due last Friday, Jan. 18, and if a deal could not be reached with its lenders, would likely seek bankruptcy protection. The company's stock fell sharply last week and was trading below 30 cents per share Friday, down from a 52-week high of $2.44.
Guilford, which has been struggling to realign its business by scaling back its apparel fabric business, moving some production to Mexico, closing plants and laying off more than 1,700 U.S. employees, reported 21% declines in sales for both its fourth quarter and fiscal year.
Fourth-quarter sales were $145.5 million. The net loss was $113 million, compared with a loss of $24.2 million in the same period the year before.
Acknowledging that debt restructuring is key to Guilford's survival, John Emrich, president and chief executive officer, said the domestic textile industry "has suffered significant declines in the past four years beginning with the Asian financial crisis, a situation exacerbated by the shrinking apparel and home fashions markets, the domestic economic slowdown and the U.S. government's unwillingness to assist."
He added that Guilford has made "dramatic and difficult operational changes over the past 18 months and continues to face harsh market and financial conditions as it attempts to position itself for the future. Executing our business plan is dependent upon the company's ability to restructure its debt."
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