Delta Mills, Inc. reported net sales of $46.5 million for the quarter ended March 29, 2003, compared to net sales of $41.2 million for the quarter ended March 30, 2002. Sales for the current year quarter increased 12.9% from sales for the previous year quarter. For the nine months ended March 29, 2003 the Company reported net sales of $128.5 million compared to net sales of $122.3 million for the nine months ended March 30, 2002, an increase of 5.1%.
The Company reported an operating loss of $0.5 million for the quarter ended March 29, 2003 compared to an operating loss of $1.9 million for the quarter ended March 30, 2002. For the nine months ended March 29, 2003 the Company reported operating profit of $3.8 million compared to an operating loss of $13.2 million for the nine months ended March 30, 2002. The operating loss reported for the current year’s quarter includes impairment and restructuring expenses associated with the closing of the Catawba Plant of $0.4 million. The operating loss reported for the previous year’s nine month period included impairment and restructuring expenses associated with closed facilities of $8.7 million. For the nine months ended March 29, 2003, the Company recorded a before tax gain of $1.3 million from the repurchase of a portion of its 9 5/8% senior notes. For the quarter and nine months ended March 30, 2002, the Company recorded a before tax gain of $0.5 million from the repurchase of a portion of these senior notes. There was no gain recorded in this category for the current year’s quarter.
The Company reported a net loss of $1.1 million for the quarter ended March 29, 2003 compared to a net loss of $2.4 million for the quarter ended March 30, 2002. For the nine months ended March 29, 2003 the Company reported net income of $0.6 million compared to a net loss of $13.0 million for the nine months ended March 30, 2002. The net loss for the three months ended March 29, 2003 includes impairment and restructuring expenses associated with the closing of the Catawba Plant of $0.2 million on an after tax basis. The net loss for the nine months ended March 30, 2002 included impairment and restructuring expenses associated with closed facilities of $5.6 million on an after tax basis.
W.F. Garrett, President and CEO, commented, “The soft retail sales and weak consumer spending we experienced in the second quarter continued into our third quarter causing our operating schedules to suffer, especially in the early part of the quarter. However, we were pleased that this year’s third quarter results showed significant improvement over last year’s third quarter. I am also encouraged that our order backlog suggests an improved plant operating schedule in the fourth quarter. However, we will continue to see price pressure, especially with our core products, in the coming months.”
CONSOLIDATED STATEMENTS OF OPERATIONS
Delta Mills Inc.
(In Thousands) 3 Months 3 Months 9 Months 9 Months
Ended Ended Ended Ended
March 29, March 30, March 29, March 30,
2003 2002 2003 2002
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Net sales $46,489 $41,190 $128,521 $122,307
Cost of goods sold 43,649 40,128 116,441 118,458
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Gross profit 2,840 1,062 12,080 3,849
Selling, general and
administrative expenses 2,969 3,033 8,430 8,496
Impairment and restructuring
expenses 398 398 8,683
Other income 48 55 536 86
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OPERATING PROFIT (LOSS) (479) (1,916) 3,788 (13,244)
Other (expense) income:
Interest expense (1,326) (2,403) (4,097) (7,402)
Interest income 51 184
Gain on extinguishment of
debt 500 1,303 500
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(1,326) (1,852) (2,794) (6,718)
--------- --------- --------- ---------
INCOME (LOSS) BEFORE INCOME
TAXES (1,805) (3,768) 994 (19,962)
Income tax expense (benefit) (705) (1,321) 369 (6,960)
--------- --------- --------- ---------
NET INCOME (LOSS) $(1,100) $(2,447) $625 $(13,002)
