SIGNAL LOSES $22.9 MILLION
CHATTANOOGA, Tenn. — Signal Apparel Co. Inc., continuing to be bogged down by losses from past acquisitions and restructuring actions, reported a loss of $22.9 million in the fourth quarter ended Dec. 31.
The sportswear firm also said it is continuing to explore additional financing in order to fund its business plans for 1996.
The loss in the quarter includes a $10.7 million writeoff from its November 1994 acquisition of American Marketing Works Inc., a printed sportswear manufacturer. In the year-ago quarter, Signal lost $41.1 million after $26.5 million in writeoffs from its July 1991 acquisition of Shirt Shed Inc., a screenprinter. Excluding the writeoffs, Signal Apparel’s losses were $12.2 million in each period.
Sales in the latest quarter fell 21.5 percent to $17.4 million from $22.2 million.
In the year, Signal’s net losses were $40 million against $62.5 million a year earlier. Excluding the charges, the losses widened slightly to $29.2 million from $26.8 million. Sales slid 6.2 percent to $89.9 million from $95.8 million.
Signal noted that it has secured several licenses in the fourth quarter, including a National Football League license to distribute children’s and adult apparel to the mass market. It also reached an agreement with Henry-Aaron Inc. to distribute Major League Baseball licensed-apparel to mass market and “upstairs” channels. It also received a license for the new Warner Bros. movie “Space Jam.”
Bruce Krebs, chief operating officer and president, said this will mark the first time Signal has secured licenses from all four major professional sports leagues. He said the new licenses, coupled with the cost reduction and consolidation plan — which included plant closings — implemented in the fourth quarter, “are important for the future of Signal.”
However, Signal said additional financing is “essential” in order to successfully implement its business plan for 1996. The company is continuing to pursue a $9 million private placement with IAM Advisory, based in Switzerland, for a substantial amount in stocks and warrants, but so far the deal has been postponed. — Fairchild News Service