NEW YORK -- The latest blow to the financial status of the domestic textile industry came Friday, when the New York Stock Exchange notified knitter Guilford Mills Corp. that its shares face delisting.
Only a few major fabric mills -- among them, Cone Mills, Delta Woodside, Dan River and Galey & Lord -- retain a place on the nation's largest exchange. Most recently, Burlington Industries Inc. was dropped from the NYSE following its bankruptcy filing last month. Galey, however, was warned this fall that it faces delisting and in November filed a plan with the exchange showing that it would meet listing standards in a few months. Delta Woodside was similarly warned in August and is planning a reverse stock split to boost its share price.
Guilford said in a statement that it intends to submit a plan in early January showing how it will meet NYSE standards. It will then have 18 months to bring its stock into compliance. Should the plan fail, Guilford said it expects its shares to trade over the counter. Companies whose shares don't trade above $1 and whose market capitalization falls below $15 million for 30 consecutive days face delisting.
Over the past 52 weeks, the Greensboro, N.C.-based mill's shares have traded as low as 30 cents and as high as $2.44. Monday, shares closed at 63 cents, for a market capitalization of $11.8 million.
Guilford shares traded heavily during the week before the announcement and came close to the $1 mark on Wednesday. According to a source, company executives recently met with Guilford's lenders and convinced them that the company would be on sound financial footing going forward.
Guilford officials were unavailable to comment on Friday.
For most major textile mills, the spectre of bankruptcy has loomed large, as low margins and high debt loads, combined with the downturn in the economy, have led to heavy financial losses.
One of Guilford's rivals, knitter Malden Mills Industries Inc., filed for bankruptcy court protection in late November. Executives at the privately held company said Malden was not profitable in the year ended Oct. 30.According to Guilford's most recent quarterly financial report, the company recorded a net loss of $44.9 million on sales of $498 million in the nine months ended July 1. At that time, the company's balance sheet showed $266.4 million in long-term debt and total liabilities of $413.8 million. Total assets were $678 million.
Of the four other mills remaining on the NYSE, Cone's share price has been the highest of late, trading in a range of $1.11 to $4.13 over the past year, with a market capitalization of $46.4 million in intraday trading Friday.
Delta Woodside's 52-week range is 75 cents to $1.50, and the company has proposed a reverse stock split that would reduce its total shares outstanding from one-third to one-tenth their current number. Its market capitalization was $20.3 million during the day Friday.
Dan River's 52-week range is 44 cents to $3.25, with a market capitalization of $11.4 million. Galey's range is 26 cents to $5.45 with a market capitalization of $3.6 million.
DuPont, Unifi and Wellman are all still traded on the NYSE at higher levels.
Over the past few years, as their market capitalizations have plummeted, textile executives have lamented that the stock market so undervalues their companies that it would cost less to buy entire firms than to buy just the machinery they operate.
Yet some have countered that if that machinery isn't producing profits, it may not be worth all that much after all. Fab Industries Inc. -- which hasn't seen its share price on the American Stock Exchange dip below $11.30 in a year and late last week was trading above the $18 mark -- recently said it was putting itself on the block as the best way for investors to get their cash out of the company. Fab had amassed a war chest, including $88.3 million in cash and liquid securities, to prepare itself for textile acquisitions, but never found any that its executives thought would pay off.
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