As reported, the company disclosed in a 10K filing with the Securities and Exchange Commission that it has closed the last of its U.S. apparel production plants.
The Greensboro, N.C.-based firm said that, in the three months ended Sept. 30, it lost $113 million, or $6.07 a diluted share, which includes $70.1 million, or $3.77 a share, of additional aftertax restructuring and impaired asset and investment charges. The company lost $24.2 million, or $1.28, in the year-ago period, inclusive of aftertax restructuring charges of $17.3 million, or 92 cents.
Sales for the quarter declined 21.3 percent, to $145.5 million from $185 million. Sales in its apparel segment declined 46.4 percent from a year ago, to $38.3 million from $71.5 million, as a result of sector exits, low-priced imports and weakened retail stores.
Waivers on its senior debt are set to expire on Friday and, without an extension, it would be in default under its senior loan agreements. In the event of default, lenders can declare all outstanding amounts due and payable and move to seize assets provided as collateral. Guilford said it would seek Chapter 11 protection if this were to occur.
Shares of Guilford dropped another 17 cents, or 32.7 percent, to close at 35 cents in New York Stock Exchange trading Wednesday.
“Guilford has effected 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,” John Emrich, president and chief executive officer, said in a statement. “Executing our business plan is dependent upon the company’s ability to restructure its debt.”
Beginning in the fourth quarter of fiscal 2000, the company embarked on a strategic realignment plan designed to match capacity to demand and reduce costs. Results of these actions included the elimination of all four domestic apparel dyeing and finishing facilities and a 29 percent reduction in staff, among others.
For the year, Guilford’s lost $160.8 million, or $8.48 per diluted share, which included $82.8 million, or $4.36 a share, in restructuring and other charges. In 2000, the company’s loss reached $21 million, or $1.11 a share, including $17.3 million, or 92 cents, in charges. Sales were $643.5 million, a 21 percent drop from last year’s sales of $814.2 million, while apparel sales sank 36.1 percent, to $187 million from $292.5 million.