Burlington posts $76M loss in 4Q
Carole Sloan -- Furniture Today, November 19, 2001
Greensboro, NC — As it was announcing its Chapter 11 bankruptcy filing, Burlington Industries, Inc., also reported a net loss of $76.7 million for the fourth quarter and a $91.1 million net loss for its fiscal year.
Additionally, the company increased its fourth-quarter operating loss to $6.4 million, over the $5.5 million operating loss posted in the fourth quarter of last year. For the fiscal year, Burlington's operating income fell more than 73 percent, to $12.5 million.
Fourth-quarter sales at Burlington dropped 23.4 percent, to slightly less than $327.1 million. For the year, the company's sales fell 13.4 percent, totaling slightly more than $1.4 billion.
Burlington filed its Chapter 11 petition last Thursday, the same day it reported its fourth-quarter and fiscal-year financial results. The company cited its heavy debt load, the slowdown in consumer spending and competition from it termed "cheap imported textiles."
Viewing this sea of red ink, both George Henderson III, chairman and chief executive officer, and Douglas J. McGregor, president and chief operating officer, cited the steady decline in the overall economy throughout this year. Henderson said, " We experienced continued slowing in the fourth quarter and began taking the necessary restructuring actions. The general outlook since September has worsened and we can no longer afford the time needed to incrementally transition our company."
Both Henderson and McGregor observed that Burlington has made some operational improvements in this trying period. Despite the difficulties, "we were able to achieve significant working-capital reductions, including $71 million reduction in inventories from a year ago," said McGregor.
"Improvements in our operations and asset sales generated substantial cash," he added, "which provided us the flexibility to pay down debt and initiate other restructuring activities. The company has approximately $60 million in cash on hand."
Burlington's results did show progress on the expense front. The company shaved 24 percent from its selling, general and administrative expenses in the fourth quarter, which totaled less than $27.5 million. As a percentage of sales, SG&A was flat compared with the fourth quarter of last year, at 8.4 percent.
For the year as a whole, SG&A dollars fell 14.5 percent, to $118.7 million. Burlington's SG&A ratio shed 210 basis points, finishing this fiscal year at 9.3 percent.
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