FTL NARROWS LOSSES IN QUARTER, CONTINUES TO LOWER INVENTORY
Byline: Vicki M. Young
NEW YORK — Bankrupt Fruit of the Loom Ltd. on Friday reported improved second-quarter results, narrowing its losses for the period and the six months.
For the quarter ended June 30, the company narrowed its loss by 35 percent, to $36.2 million, or 54 cents, versus a $55.9 million loss, or 83 cents, in the year-ago period. Excluding $5.6 million in restructuring costs and $500,000 in income taxes, the loss in the current quarter would have been $30.1 million. Sales dropped 22.3 percent, to $347.7 million from $447.4 million.
Dennis Bookshester, chief executive officer, said: “The company continues to be well positioned to emerge from bankruptcy.”
As reported, FTL has been in bankruptcy proceedings since Dec. 29, 1999. The company filed a plan of reorganization in a Delaware bankruptcy court on March 15, 2001.
Improvements in the second quarter and six-month periods reflect reductions in production costs and lower selling, general and administrative expenses, the company said.
For the six months, the loss improved by 39 percent, to $82.9 million, or $1.24, compared with $135.1 million, or $2.06, in the year-ago period. Excluding restructuring charges and income tax, the loss would have been $65.7 million. Sales in the period were down 19.6 percent, to $661.9 million from $823 million.
The company said that the lower sales volume in the six months was “principally due to lower activewear sales, which were affected by the overall activewear market combined with competitively lower pricing.”
FTL also noted that the higher sales volume posted in the first half of last year included sales of discontinued noncore retail and activewear product lines, and the Gitano jeanswear business. The company said that it “continued its leadership position in mass-merchant sales of men’s and boys’ underwear.”
The company also said it continues to focus on reducing inventories, which are at their lowest levels in over eight years. At the end of June 30, inventory was $492 million, a $73.4 million decline from July 1, 2000.
As of July 25, the borrowing availability under FTL’s debtor-in-possession credit facility was $260.9 million. The company said there were no borrowings under the revolver component of the DIP during the first six months of the year, typically the “seasonal peak for the company’s working capital needs.”