SIGNAL APPAREL CUTS LOSS IN 4TH QUARTER TO $12.6M
CHATTANOOGA — Signal Apparel Co. reported a fourth-quarter loss of $12.6 million, compared with $22.9 million a year ago. The year-ago figure included a $10.7 million writeoff of goodwill.
Sales for the three months ended Dec. 31 fell 37.7 percent to $10.8 million from $17.4 million, reflecting a decision to substantially reduce manufacturing undecorated activewear in line with changing conditions in the apparel market.
For the year, the company’s losses fell to $33.7 million from $39.9 million after the writeoff. Sales sank 34.6 percent to $58.8 million from $89.9 million.
The knitwear firm also reported it had entered into an agreement in principle with its senior lender for a $67 million credit facility. The new agreement will adjust and extend the company’s current facility through March 31, 2000. It consists of a $33 million revolving advance account, which is similar in terms to the company’s current revolving advance account, and a $34 million additional facility replacing an existing $14 million credit. Borrowing availability depends on levels of inventory and receivables, among other things.
Signal said it expects the new facility to adequately cover its credit needs through 1997, based on its current operating plan.
In December 1996, the company initiated a turnaround plan to reduce its emphasis on manufacturing low-margin undecorated activewear and increase its emphasis on higher margin screen-printed activewear.