LESLIE FAY POSTS BIGGER LOSS IN QUARTER BUT ENDS THE YEAR WITH A $9.7M PROFIT
NEW YORK — Leslie Fay Cos. widened its net loss in the fourth quarter but still managed to earn a profit for the year.
In the quarter ended Dec. 28, the net loss grew to $4.3 million from $3.1 million, primarily due to higher bankruptcy reorganization costs.
The operating loss was cut to $2.1 million from $3.6 million, but reorganization expenses jumped to $2.9 million from $1.3 million, and interest and financing costs grew to $1.1 million from $689,000.
Sales in the quarter increased 15.9 percent to $90.3 million from $77.9 million.
In the year, Leslie Fay notched a net profit of $9.7 million, or 52 cents, against a net loss of $17.8 million.
Operating earnings catapulted to $17.1 million from $1.2 million. Reorganization costs were chopped to $5.1 million from $16.6 million while interest and financing costs nudged up to $3.9 million from $3.3 million.
Sales sagged 2.8 percent to $429.7 million from $442.1 million.
The women’s sportswear and dress manufacturer, in Chapter 11 proceedings since April 1993, has filed a reorganization plan that calls for splitting the company into two entities — the Sassco Fashions business, primarily a suit firm, and its core reorganized Leslie Fay dress and sportswear operation.
Leslie Fay expects to emerge from bankruptcy proceedings in the second quarter.
In another development, the company on Monday got another extension of its debtor-in-possession facility to insure access to working capital while its awaits confirmation of its reorganization plan.
The $60 million facility now expires May 3. First National Bank of Boston and Bank America Business Credit Inc., the lenders, will share a $75,000 fee for the April extension.
The original DIP facility was set to expire Dec. 31, but Leslie Fay was given a one-month extension in the expectation that the confirmation hearing would proceed on Jan. 14. Since then, Leslie Fay has had three extensions of its DIP facility while it awaits its plan confirmation.
The latest delay was due in part to a slight plan modification in the wake of the March 7 proposed settlement of a shareholders’ class-action suit, as well as vacation plans of Bankruptcy Judge Tina Brozman, who returned to work Monday.