/raid1/www/Hosts/bankrupt/TCR_Public/041113.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Saturday, November 13, 2004, Vol. 8, No. 249
Headlines
AVALON DIGITAL: Posts $37,488 of Net Loss in September 2004
BURLINGTON: BII Trust's July to September 2004 Financial Report
DAN RIVER: Posts $13.3 Million Net Loss in September 2004
FAO INC: Reports Sitting on $37.4 Million of Cash at Sept. 30
FAO INC: Reports Sitting on $37.19 Million of Cash at Oct. 30
FEDERAL-MOGUL: Earns $7.3 Million of Net Income in September 2004
FINOVA GROUP: Posts $23 Million of Third Quarter Net Income
HAYES LEMMERZ: Reports Third Quarter 2004 Financial Results
MARINER HEALTH: Posts $5.7 Million of Net Loss in Third Quarter
MIRANT CORP: Earns $32 Million of Net Income in Third Quarter
OWENS CORNING: Reports $94 Million of Net Income in 3rd Quarter
PACIFIC GAS: Posts $248 Million of Net Income in Third Quarter
PARMALAT: Finanziaria Reports September 2004 Financial Results
SOLUTIA INC: Posts $18 Million of Net Loss in Third Quarter 2004
SOLUTIA INC: September 2004 Net Loss is at $1 Million
USG CORP: Posts $16.5 Million Net Earnings in September 2004
USG CORP: Posts Record $1.2 Billion Net Sales in Third Quarter
WESTPOINT STEVENS: Posts $38.5 Mil. of Net Loss in September 2004
WESTPOINT STEVENS: 3rd Quarter Net Loss Balloons to $52.6 Million
WESTPOINT STEVENS: WP Stevens I Posts $4.1 Mil. Income in Sept.
WESTPOINT STEVENS: JP Stevens Enterprises' Sept. Operating Report
WESTPOINT STEVENS: JP Stevens & Co.'s Sept. 2004 Operating Report
WESTPOINT STEVENS: WP Stevens Stores' Sept. 2004 Operating Report
*********
AVALON DIGITAL: Posts $37,488 of Net Loss in September 2004
-----------------------------------------------------------
Avalon Digital Marketing Systems, Inc., filed its monthly
operating report for the period from Sept. 1, 2004, to Sept. 30,
2004. Avalon Digital reported a $37,488 net loss in $111,587 of
gross profit for September 2004.
At Sept. 30, 2004, Avalon Digital's balance sheet showed:
Current Assets $82,509
Total Assets 305,925
Postpetition Debts 610,892
Prepetition Debts 9,409,308
Total Owners' Equity $9,714,275
A full-text copy of Avalon Digital Marketing Systems, Inc.'s
September 2004 Monthly Operating Report is available at no charge
at:
http://www.sec.gov/Archives/edgar/data/1095792/000009631304000255/avalondigitalexh991904.txt
On September 5, 2003, Avalon Digital Marketing Systems, Inc.,
filed a voluntary petition for reorganization under Chapter 11 of
the United States Bankruptcy Code in the U.S. Bankruptcy Court in
Salt Lake City, Utah. The case has been assigned to Judge Glen E.
Clark and is being administered under Case No. 03-35180.
BURLINGTON: BII Trust's July to September 2004 Financial Report
---------------------------------------------------------------
BII Distribution Trust
Unaudited Cash Balance Sheet
As of September 30, 2004
Assets:
Cash $44,963,766
Letters of Credit - Cash Collateral 1,475,592
------------
$46,439,358
============
Liabilities:
BII Distribution Trust Reserve $29,549,284
BII Distribution Trust - Letters of Credit 1,475,592
BII Liquidation Real Estate LLC 2,736,933
BII Dist. Trust - Class 4 Unsecured Claim Reserve 12,677,549
BII Dist. Trust - Working Capital Escrow 0
BII Dist. Trust - Working Capital Escrow Interest 0
------------
$46,439,358
============
BII Distribution Trust
Unaudited Cash Receipts and Disbursements
From July 1, 2004 through September 30, 2004
Cash Receipts:
Closing date sale proceeds, net -
Post closing working capital adjustment -
Excluded assets monetized $769,394
Assets monetized due to Buyer -
Interest income 186,389
------------
955,783
Cash Disbursements:
Distributions 86,330,623
Secured lender claims 0
Court appointed professionals expense 0
Allowed claims 344,432
Trust expenses 1,766,781
------------
88,441,836
------------
Net increase (decrease) in cash (87,486,053)
Cash at beginning of period 133,925,411
------------
Cash at end of period $46,439,358
============
Headquartered in Greensboro, North Carolina, Burlington
Industries, Inc. -- http://www.burlington-ind.com/-- was one of
the world's largest and most diversified manufacturers of soft
goods for apparel and interior furnishings. The Company filed
for chapter 11 protection in November 15, 2001 (Bankr. Del. Case
No. 01-11282). Daniel J. DeFranceschi, Esq., at Richards, Layton
& Finger, and David G. Heiman, Esq., at Jones Day, represent the
Debtors. WL Ross & Co. LLC purchased Burlington Industries and
then sold the Lees Carpets business to Mohawk Industries, Inc.
Combining Burlington with Cone Mills, WL Ross created
International Textile Group. Burlington's chapter 11 Plan
confirmed on October 30, 2003, was declared effective on Nov. 10,
2003. (Burlington Bankruptcy News, Issue No. 56; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
DAN RIVER: Posts $13.3 Million Net Loss in September 2004
---------------------------------------------------------
On Nov. 1, 2004, Dan River Inc., filed its monthly operating
report for September of fiscal 2004, which includes the period
from Sept. 5, 2004 to Oct. 2, 2004, with the United States
Bankruptcy Court for the Northern District of Georgia. The
Company reports a $13.3 million net loss in $31.4 million of net
sales.
At Oct. 2, 2004, Dan River's balance sheet showed:
Total current assets $204,864,000
Total Assets 374,196,000
Total current liabilities 146,433,000
Total liabilities
not subject to compromise 173,978,000
Liabilities
subject to compromise 193,290,000
Total shareholders' equity $6,928,000
A full-text copy of Dan River Inc.'s monthly financial report for
the period from Sept. 5, 2004 to Oct. 2, 2004, is available at no
charge at:
http://www.sec.gov/Archives/edgar/data/914384/000091438404000027/e9911404.txt
Headquartered in Danville, Virginia, Dan River Inc.
-- http://www.danriver.com/-- designs, manufactures and markets
textile products for the home fashions, apparel fabrics and
industrial markets. The Company and its debtor-affiliates filed
for chapter 11 protection on March 31, 2004 (Bankr. N.D. Ga. Case
No. 04-10990). James A. Pardo, Jr., Esq., at King & Spalding
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$441,800,000 in total assets and $371,800,000 in total debts.
FAO INC: Reports Sitting on $37.4 Million of Cash at Sept. 30
-------------------------------------------------------------
At Sept. 30, 2004, FAO Inc. (n/k/a Children's Books & Toys, Inc.),
reports sitting on $37,431,737 of cash.
At Sept. 30, 2004, FAO Inc.'s balance sheet showed:
Total Current Assets $37,965,000
Total Assets 40,821,600
Total Postpetition Debts 15,530,700
Total Prepetition Debts 58,775,800
Total Liabilities 74,306,500
Total Net Owner Equity $(33,484,900)
A full-text copy of FAO Inc.'s and its subsidiaries' September
2004 Monthly Operating Report is available at no charge at:
http://www.sec.gov/Archives/edgar/data/878720/000110465904033584/a04-12375_1ex99d2.htm
As previously reported in the Troubled Company Reporter, Judge
Rosenthal confirmed the Debtors' and Creditors' Committee's Second
Amended Joint Plan of Liquidation under Chapter 11 of the
Bankruptcy Code (As Modified). The Plan took effect Nov. 8, 2004.
Under the Plan, the Debtors will be liquidated, the cash will be
divided up among the failed toy retailer's creditors and all
equity interests in the company are cancelled.
FAO Inc. (n/k/a Children's Books & Toys, Inc.) and its wholly
owned subsidiaries ZB Company, Inc., FAO Schwarz, Inc. (n/k/a Toy
Soldier, Inc.), The Right Start, Inc. (n/k/a TRS Liquidation Co.),
and Targoff-RS, LLC, filed for chapter 11 protection a second time
on December 4, 2003 (Bankr. D. Del. Case No. 03-13672), eight
months after they emerged from their first chapter 11 cases
(Bankr. D. Del. Case Nos. 03-10119 through 03-10122). Mark D.
Collins, Esq., at Richards Layton & Finger, represents the
Debtors. When the failed toy retailer filed for bankruptcy, it
listed $102,079,000 in assets and $85,898,000 in liabilities. On
October 27, 2004, the Bankruptcy Court approved the Debtors' and
Creditors' Committee's Second Amended Joint Plan of Liquidation.
The Plan took effect November 8, 2004.
FAO INC: Reports Sitting on $37.19 Million of Cash at Oct. 30
-------------------------------------------------------------
At Oct. 31, 2004, FAO Inc. (n/k/a Children's Books & Toys, Inc.),
reports sitting on $37,191,338 of cash.
At Oct. 31, 2004, FAO Inc.'s balance sheet showed:
Total Current Assets $37,724,600
Total Assets 40,573,100
Total Postpetition Debts 15,510,200
Total Prepetition Debts 58,744,100
Total Liabilities 74,254,300
Total Net Owner Equity $(33,681,200)
A full-text copy of FAO Inc.'s and its subsidiaries' October 2004
Monthly Operating Report is available at no charge at:
http://www.sec.gov/Archives/edgar/data/878720/000110465904033584/a04-12375_1ex99d3.htm
As previously reported in the Troubled Company Reporter, Judge
Rosenthal confirmed the Debtors' and Creditors' Committee's Second
Amended Joint Plan of Liquidation under Chapter 11 of the
Bankruptcy Code (As Modified). The Plan took effect Nov. 8, 2004.
Under the Plan, the Debtors will be liquidated, the cash will be
divided up among the failed toy retailer's creditors and all
equity interests in the company are cancelled.
FAO Inc. (n/k/a Children's Books & Toys, Inc.) and its wholly
owned subsidiaries ZB Company, Inc., FAO Schwarz, Inc. (n/k/a Toy
Soldier, Inc.), The Right Start, Inc. (n/k/a TRS Liquidation Co.),
and Targoff-RS, LLC, filed for chapter 11 protection a second time
on December 4, 2003 (Bankr. D. Del. Case No. 03-13672), eight
months after they emerged from their first chapter 11 cases
(Bankr. D. Del. Case Nos. 03-10119 through 03-10122). Mark D.
Collins, Esq., at Richards Layton & Finger, represents the
Debtors. When the failed toy retailer filed for bankruptcy, it
listed $102,079,000 in assets and $85,898,000 in liabilities. On
October 27, 2004, the Bankruptcy Court approved the Debtors' and
Creditors' Committee's Second Amended Joint Plan of Liquidation.
The Plan took effect November 8, 2004.
FEDERAL-MOGUL: Earns $7.3 Million of Net Income in September 2004
-----------------------------------------------------------------
Federal-Mogul Global, Inc., et al.
Unaudited Balance Sheet
As of September 30, 2004
(In millions)
Assets
Cash and equivalents $315.4
Accounts receivable 621.0
Inventories 490.8
Deferred taxes 199.6
Prepaid expenses and other current assets 115.1
---------
Total current assets 1,742.0
Summary of Unpaid Postpetition Debits (67.4)
Intercompany Loans Receivable (Payable) 2,509.4
---------
Intercompany Balances 2,442.0
Property, plant and equipment 1,058.3
Goodwill 1,177.3
Other intangible assets 450.3
Insurance recoverable 815.7
Other non-current assets 1,085.3
---------
Total Assets $8,770.7
=========
Liabilities and Shareholders' Equity
Short-term debt $358.5
Accounts Payable 203.2
Accrued Compensation 73.6
Restructuring and rationalization reserves 13.3
Current portion of asbestos liability (0.0)
Interest Payable 0.4
Other accrued liabilities 311.4
---------
Total current liabilities 960.5
Long-term debt -
Post-employment benefits 1,482.9
Other accrued liabilities 964.3
Liabilities subject to compromise 6,092.8
Shareholders' equity:
Preferred stock 1,050.8
Common stock 555.3
Additional paid-in capital 7,937.2
Accumulated deficit (9,640.6)
Accumulated other comprehensive income (632.2)
Other -
---------
Total Shareholders' Equity (729.6)
---------
Total Liabilities and Shareholders' Equity $8,770.8
=========
Federal-Mogul Global, Inc., et al.
Unaudited Statement of Operations
For the month ended September 30, 2004
(In millions)
Net sales $293.5
Cost of products sold 243.0
---------
Gross margin 50.5
Selling, general & administrative expenses (47.8)
Amortization (1.1)
Reorganization items 12.9
Interest income (expense), net (8.0)
Other income (expense), net 8.1
---------
Earnings before Income Taxes 14.6
Income Tax (Expense) Benefit (7.4)
---------
Earnings before effect of change in acctg principle 7.3
Cumulative effect of change in acctg principle -
---------
Net Earnings (loss) $7.3
=========
Federal-Mogul Global, Inc., et al.
Unaudited Statement of Cash Flows
For the month ended September 30, 2004
(In millions)
Cash Provided From (Used By) Operating Activities:
Net earnings (loss) $7.3
Adjustments to reconcile net earnings (loss):
Depreciation and amortization 14.0
Adjustments of assets held for sale to fair value 9.0
Asbestos Charge -
Summary of unpaid postpetition debits -
Cumulative effect of change in acctg principle -
Change in post-employment benefits 9.1
Decrease/(increase) in accounts receivable (41.4)
Decrease/(increase) in inventories 4.8
Increase/(decrease) in accounts payable (2.4)
Change in other assets and other liabilities (29.8)
Change in restructuring charge (2.0)
Refunds (payments) against asbestos liability -
---------
Net Cash Provided From Operating Activities (31.4)
Cash Provided From (Used By) Investing Activities:
Expenditures for property, plant & equipment (7.8)
Proceeds from sale of property, plant & equipment -
Proceeds from sale of businesses -
Business acquisitions, net of cash acquired -
Other -
---------
Net Cash Provided From (Used By) Investing Activities (7.8)
Cash Provided From (Used By) Financing Activities:
Increase (decrease) in debt 45.7
Sale of accounts receivable under securitization -
Dividends -
Other 3.8
---------
Net Cash Provided From Financing Activities 49.5
Increase (Decrease) in Cash and Equivalents 10.3
Cash and equivalents at beginning of period 305.1
---------
Cash and equivalents at end of period $315.4
=========
FINOVA GROUP: Posts $23 Million of Third Quarter Net Income
-----------------------------------------------------------
The FINOVA Group, Inc.
Unaudited Condensed Consolidated Balance Sheet
As of September 30, 2004
(In Thousands)
Assets
Current Assets:
Cash and cash equivalents $509,323
Restricted cash - impermissible restricted pmts. 29,679
Financing Assets:
Loans and other financing contracts, net 550,037
Direct Financing leases 165,066
---------
Total financing assets 715,103
Reserve for credit losses (145,353)
---------
Net Financing assets 569,750
Other Financial Assets:
Operating leases 66,046
Assets held for sale 116,760
Assets held for the production income 30,789
Investments 27,734
---------
Total other financial assets 241,329
---------
Total Financial Assets 811,079
Other assets 20,089
---------
Total Assets $1,370,170
=========
Liabilities and Stockholders' Equity
Liabilities:
Berkadia loan -
Senior Notes, net $1,810,398
Senior debt - Predecessor Company -
---------
Total debt 1,810,398
Accounts payable and accrued expenses 126,754
Deferred income taxes, net 4,964
---------
Total Liabilities 1,942,116
Stockholders' Equity:
Common Stock 1,259
Additional capital 108,256
Accumulated deficit (680,581)
Accumulated other comprehensive (loss) income (344)
Common stock in treasury (536)
---------
Total Stockholders' Equity (571,946)
---------
Total Liabilities and Stockholders' Equity $1,370,170
=========
The FINOVA Group, Inc.
Unaudited Condensed Statements of Consolidated Operations
Three Months Ended September 30, 2004
(In Thousands)
Revenues:
Interest income $15,714
Rental income 4,557
Operating leases income 11,923
Fees and other income 3,930
---------
Total Revenues 36,124
Interest expense (62,246)
Operating lease and other depreciation (4,076)
---------
Interest Margin (30,198)
Other Revenues and (Expenses):
Reversal of provision for credit losses 32,248
Net gain on financial assets 33,507
Portfolio expenses (5,621)
General & Administrative expenses (6,866)
---------
Total Other Revenues and (Expenses) 53,268
Income from continuing operations before
Income taxes and preferred dividends 23,070
Income tax expense -
---------
Net Income $23,070
=========
The FINOVA Group Inc.
Unaudited Condensed Statements of Consolidated Cash Flows
Nine Months Ended September 30, 2004
(In Thousands)
Operating Activities:
Net Income $84,134
Adjustment to reconcile net income to net
cash provided by operating activities:
Reversal of provision for credit losses (102,611)
Net cash gain on disposal of financial assets (60,648)
Net non-cash (gain) charge off of financial assets (5,539)
Depreciation and amortization 14,404
Deferred income taxes, net 914
Other amortization 10,234
Change in assets and liabilities:
Decrease in other assets 2,378
Increase in accounts payable and accrued expenses 11,153
---------
Net Cash Used by Operating Activities (46,114)
Investing Activities:
Proceeds from disposals of leases and other assets 54,106
Proceeds from sales of investments 11,338
Proceeds from sales of loans and financing leases 195,799
Collections from financial assets 643,805
Fundings under existing customer commitments (50,605)
Recoveries of loans previously written-off 30,445
Deposits of impermissible restricted payments
into restricted cash account (29,679)
---------
Net Cash Provided by Investing Activities 855,209
Financing Activities:
Repayments of Berkadia Loan (525,000)
Repayments of Senior Notes (563,910)
---------
Net Cash Used by Financing Activities (1,088,910)
Decrease in Cash and Cash Equivalents (279,815)
Cash and Cash Equivalents, beginning of period 789,138
---------
Cash and Cash Equivalents, end of period $509,323
=========
A full-text copy of The FINOVA Group's Form 10-Q Report ending
September 30, 2004, is available for free at the Securities and
Exchange Commission at:
http://www.sec.gov/Archives/edgar/data/883701/000119312504192814/d10q.htm
Headquartered in Scottsdale, Arizona, The Finova Group, Inc.,
provides commercial financing to small and midsized businesses;
other services include factoring, accounts receivable management,
and equipment leasing. The firm has three segments: Commercial
Finance, Specialty Finance, and Capital Markets. FINOVA targets
such markets as transportation, wholesaling, communication, health
care, and manufacturing. Loan write-offs had put the firm on shaky
ground. The Company and its debtor-affiliates and subsidiaries
filed for Chapter 11 protection on March 7, 2001 (U.S. Bankr. Del.
01-00697). Daniel J. DeFranceschi, Esq., at Richards, Layton &
Finger, P.A., represents the Debtors. FINOVA has since emerged
from Chapter 11 bankruptcy. Financial giants Berkshire Hathaway
and Leucadia National Corporation (together doing business as
Berkadia) own FINOVA through the almost $6 billion lent to the
commercial finance company. (Finova Bankruptcy News, Issue No. 52;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
HAYES LEMMERZ: Reports Third Quarter 2004 Financial Results
-----------------------------------------------------------
HLI Creditor Trust
Unaudited Cash Balance Sheet
As of September 30, 2004
Assets:
Cash $10,821,695
Liabilities:
Trust Expenses Reserve, net 10,821,695
Reimbursements to Reorganized Debtors account 0
Claimholder distribution reserve 0
----------
$10,821,695
==========
HLI Creditor Trust
Unaudited Statement of Cash Receipts and Disbursements
Period from June 3, 2003 through September 30, 2004
Cash Receipts:
Funding of Expense Advance $1,250,000
Trust Recoveries 17,246,033
Interest Income 20,279
----------
18,516,312
----------
Cash Disbursements:
Repayment of expense advance (1,250,000)
Trust Expenses (6,444,617)
----------
(7,694,617)
----------
Net increase (decrease) in cash 10,821,695
Cash at beginning of period -
----------
Cash at end of period $10,821,695
==========
HLI Creditor Trust
Unaudited Statement of Cash Receipts and Disbursements
For the Period July 1 to September 30, 2004
Cash Receipts:
Funding of Expense Advance $0
Trust Recoveries 6,166,312
Interest Income 12,347
----------
6,178,659
----------
Cash Disbursements:
Repayment of expense advance (0)
Reimbursements to Reorganized Debtors (0)
Distributions to beneficiaries (0)
Trust Expenses (1,345,631)
----------
(1,345,631)
----------
Net increase (decrease) in cash 4,833,028
Cash at beginning of period 5,988,667
----------
Cash at end of period $10,821,695
==========
Hayes Lemmerz International, Inc., is a world leading global
supplier of automotive and commercial highway wheels, brakes,
powertrain, suspension, structural and other lightweight
components. The Company filed for chapter 11 protection on
December 5, 2001 (Bankr. D. Dela. Case No. 01-11490). Eric
Ivester, Esq. at Skadden, Arps, Slate, Meager & Flom and Mark S.
Chehi, Esq. at Skadden, Arps, Slate, Meager & Flom represent the
Debtors' in their restructuring efforts. (Hayes Lemmerz
Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
MARINER HEALTH: Posts $5.7 Million of Net Loss in Third Quarter
---------------------------------------------------------------
Mariner Health Care, Inc., reported a net loss for the 2004
third quarter of ($5.7) million as compared to net income of
$6.1 million for the comparable 2003 period. This loss is
primarily attributable to an increase in taxes, merger related
charges and discontinued operations.
Revenues decreased $26.7 million, or 6.1% to $413.1 million
from $439.8 million for the same period last year, primarily due
to facilities divested during the three months ended December 31,
2003. For facilities operated at September 30, 2004, revenues
increased 5.8% to $413.1 million from $390.5 million for the
three months ended September 30, 2003. Mariner achieved a
significant improvement in Adjusted EBITDA -- earnings before
interest, taxes, depreciation and amortization, and certain
divestiture and merger related items -- to $22.5 million for the
third quarter ended September 30, 2004 as compared to $16.8
million for the same period in 2003.
Nine Month Results
Consolidated revenues for the nine months ended September 30, 2004
decreased 4.4% to $1,229.7 million from $1,285.7 million for the
comparable 2003 period. The decrease in revenues is primarily
related to the divestiture of facilities during the fourth quarter
of 2003. Mariner recorded net income of $3.9 million for the nine
months ended September 30, 2004 as compared to net income of $7.2
million for the comparable 2003 period. Adjusted EBITDA was $74.6
million for the nine months ended September 30, 2004, as compared
to $49.1 million for the comparable 2003 nine-month period.
Mariner's average per diem rate for Medicare Part A for same
facility operations increased 8.8%, from $299.42 for the nine
months ended September 30, 2003 to $325.76 for the nine months
ended September 30, 2004. This resulted in increased revenues of
$25.6 million.
Operating Commentary
As a percentage of total revenues, same facility Medicare
revenues grew slightly, increasing to 31.3% for the third quarter
of 2004 from 30.7% for the same period in 2003. Same facility
Medicare revenues associated with Mariner's skilled nursing and
long-term acute care hospital segments accounted for 24.6% and
6.7% of total revenues, respectively, for the third quarter of
2004 compared to 24.5% and 6.2% of total revenues, for the same
period in 2003.
"In addition to making significant progress with the proposed
merger we maintained our operational focus during the quarter,"
said C. Christian Winkle, Chief Executive Officer. "For the third
quarter of 2004, our Adjusted EBITDA margin improved to 5.4% from
4.3% from the same period last year. Furthermore, profitability
of both our skilled nursing facility and long-term acute care
hospital groups continued to show improvement during the quarter.
These improvements reflect the continued success of our
operational strategies."
Merger Agreement
On June 29, 2004, the Company entered into a merger agreement with
National Senior Care, Inc. and NCARE Acquisition Corp., a wholly
owned subsidiary of NSC established for the purpose of acquiring
the Company. Pursuant to the Merger Agreement, NCARE will acquire
the issued and outstanding shares of common stock of the Company
for $30.00 per share in cash. The merger is expected to close in
December of 2004 and is subject to various conditions described in
the Merger Agreement and the definitive proxy statement, including
but not limited to the approval of the stockholders of the
Company. The Company has previously announced that it will hold
an annual meeting of its stockholders on Tuesday, November 30,
2004 to vote on the proposed merger.
A full-text copy of Mariner's third quarter results filed on Form
10-Q with the Securities and Exchange Commission is available for
free at:
http://www.sec.gov/Archives/edgar/data/882287/000095014404010512/g91607e10vq.htm
Mariner Health Care, Inc.
Condensed Consolidated Balance Sheets
As of September 30, 2004
(in thousands)
Assets
Current assets
Cash and cash equivalents $46,766
Receivables, net of allowance for doubtful
accounts of $105,939 and $97,448 213,631
Prepaid expenses and other current assets 22,748
----------
Total current assets 283,145
Property and equipment, net 530,584
Reorganization value 192,771
Goodwill, net of accumulated amortization of $970 6,797
Restricted investments 16,962
Other assets 35,720
----------
Total Assets $1,065,979
==========
Liabilities and Stockholders' Equity
Current liabilities
Current maturities of long-term debt $17,183
Accounts payable 40,699
Accrued compensation and benefits 69,753
Accrued insurance obligations 84,544
Other current liabilities 56,399
----------
Total current liabilities 268,578
Long-term debt, net of current maturities 366,508
Long-term insurance reserves 144,202
Other liabilities 23,251
Minority interest 3,342
----------
Total liabilities 805,881
Stockholders' equity
Preferred stock -
Common stock 200
Warrants to purchase common stock -
Capital surplus 361,083
Unearned compensation (345)
Accumulated deficit (100,980)
Accumulated other comprehensive income 140
----------
Total stockholders' equity 260,098
----------
Total Liabilities and Stockholders' Equity $1,065,979
==========
Mariner Health Care, Inc.
Condensed Consolidated Statements of Operations
For The Three Months Ended September 30, 2004
(in thousands)
Net revenue $413,103
Costs and expenses
Operating expenses
Wage and related costs 237,442
Supplies 23,179
Insurance 16,768
Provision for bad debt 4,507
Rent expense 8,419
Other 73,808
----------
Total operating expenses 364,123
General and administrative 27,001
Merger related costs 4,880
Depreciation and amortization 10,239
----------
Total costs and expenses 406,243
----------
Operating income 6,860
Other income (expenses):
Interest expense (8,220)
Interest income 756
Other (13)
----------
(Loss) Income from continuing operations before taxes (591)
(Benefit) provision for income taxes 3,415
----------
(Loss) income from continuing operations (4,006)
Discontinued operations
(Loss) gain on sale of discontinued
operations, net of tax 93
(Loss) income from discontinued operations,
net of tax (1,803)
----------
Net income (loss) ($5,716)
==========
Mariner Health Care, Inc.
Condensed Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2004
(in thousands)
Cash flows from operating activities
Net income $3,864
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for bad debts 11,923
Gain from divestitures and sales (2,600)
Depreciation and amortization 30,430
Amortization of deferred financing costs 1,464
Stock compensation 278
Minority interest and other 23
Provision (benefit) for income taxes 5,041
Loss from discontinued operations 3,791
Changes in operating assets and liabilities:
Receivables 6,864
Prepaid expenses and other current assets 1,613
Accounts payable (28,682)
Accrued and other current liabilities 14,090
Insurance reserves (16,693)
Other (8,273)
----------
Net cash (utilized) provided by operating
activities from continuing operations
before reorganization items 23,133
----------
Net cash (utilized) provided by discontinued
operations (3,872)
----------
Payment of reorganization items, net (3,956)
Cash flows from investing activities
Purchases of property and equipment (25,002)
Proceeds from divestitures and sales 12,293
Restricted investments 2,141
Collections on notes receivable 6,040
Insurance proceeds -
----------
Net cash utilized by investing activities (4,528)
Cash flows from financing activities
Repayment of long-term debt (5,945)
----------
Net cash utilized by financing activities (5,945)
(Decrease) increase in cash and cash equivalents 4,832
Cash and cash equivalents, beginning of period 41,934
----------
Cash and cash equivalents, end of period $46,766
==========
Mariner Post-Acute Network, Inc., Mariner Health Group, Inc., and
scores of debtor-affiliates filed for chapter 11 protection on
January 18, 2000 (Bankr. D. Del. Case Nos. 00-113 through 00-301).
Mark D. Collins, Esq., at Richards, Layton & Finger, P.A.,
represents the Reorganized Debtors, which emerged from bankruptcy
under the terms of their Second Amended Joint Plan of
Reorganization declared effective on May 13, 2002. (Mariner
Bankruptcy News, Issue No. 63; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
MIRANT CORP: Earns $32 Million of Net Income in Third Quarter
-------------------------------------------------------------
Mirant Corporation and Subsidiaries
Unaudited Consolidated Balance Sheet
As of September 30, 2004
ASSETS
Cash and cash equivalents $1,541,000,000
Funds on deposit 201,000,000
Receivables, net 988,000,000
Price risk management assets 201,000,000
Inventories 284,000,000
Assets held for sale 203,000,000
Other 283,000,000
--------------
Total Current Assets 3,701,000,000
Property, plant and equipment, net 6,254,000,000
Non-current Assets:
Goodwill, net of amortization 587,000,000
Other intangible assets, net 272,000,000
Investments 247,000,000
Price risk management assets 142,000,000
Funds on deposit 135,000,000
Other 467,000,000
--------------
Total Non-current Assets 1,850,000,000
--------------
TOTAL ASSETS $11,805,000,000
==============
LIABILITIES AND EQUITY
Current Liabilities:
Short-term debt $17,000,000
Current portion of long-term debt 212,000,000
Accounts payable and accrued liabilities 598,000,000
Price risk management liabilities 244,000,000
Transition power agreements 74,000,000
Other 213,000,000
--------------
Total current liabilities 1,358,000,000
Non-current Liabilities:
Long-term debt 1,161,000,000
Price risk management liabilities 166,000,000
Transition power agreements 6,000,000
Other 738,000,000
--------------
Total Non-current liabilities 2,071,000,000
Liabilities subject to compromise 8,933,000,000
Minority interest in subsidiaries 169,000,000
Stockholders' Equity:
Common stock 4,000,000
Additional paid-in capital 4,918,000,000
Accumulated deficit (5,585,000,000)
Accumulated other comprehensive loss (61,000,000)
Treasury stock, at cost (2,000,000)
--------------
TOTAL STOCKHOLDERS' DEFICIT (726,000,000)
--------------
TOTAL LIABILITIES & STOCKHOLDERS DEFICIT $11,805,000,000
==============
Mirant Corporation and Subsidiaries
Unaudited Consolidated Statements of Income
For the three months ended September 30, 2004
REVENUES:
Generation $983,000,000
Integrated utilities and distribution 147,000,000
Net trading revenue (9,000,000)
--------------
Total Operating Revenues 1,121,000,000
Cost of fuel, electricity and other products 584,000,000
--------------
Gross Margin 537,000,000
--------------
OPERATING EXPENSES:
Operations and maintenance 239,000,000
Depreciation and amortization 77,000,000
Impairment losses and restructuring charges 9,000,000
Loss (gain) on sale of assets, net 65,000,000
--------------
Total Operating Expenses 390,000,000
--------------
Operating Income (loss) 147,000,000
OTHER (EXPENSE) INCOME, NET:
Interest expense (32,000,000)
Interest rate hedging losses --
Equity in income of affiliates 6,000,000
Interest income 3,000,000
Other, net 3,000,000
--------------
Total other expense, net (20,000,000)
Income (loss) from continuing
operations before taxes 127,000,000
Reorganization items, net 62,000,000
Provision (benefit) for income taxes 17,000,000
Minority interest 5,000,000
--------------
Income (loss) from continuing operations 43,000,000
Loss from discontinued operations, net of tax (11,000,000)
--------------
Income (loss) before change
in accounting principles 32,000,000
--------------
NET INCOME (LOSS) $32,000,000
==============
Mirant Corporation and Subsidiaries
Unaudited Consolidated Statements of Cash Flows
For the nine months ended September 30, 2004
Cash Flows from Operating Activities:
Net income $94,000,000
Adjustments:
Equity in income of affiliates (19,000,000)
Dividends received from equity investments 15,000,000
Non-cash charges for reorganization items 137,000,000
Change in accounting principles --
Depreciation and amortization 240,000,000
Amortization of power agreements (288,000,000)
Restructuring charges 55,000,000
Price risk management activities, net (93,000,000)
Deferred income taxes 12,000,000
Loss (gain) on sales of assets 50,000,000
Minority interest 17,000,000
Interest rate hedging losses --
Other, net 6,000,000
Change in operating assets and liabilities:
Receivables, net 143,000,000
Other current assets (56,000,000)
Other assets 7,000,000
Accounts payable and accrued liabilities (273,000,000)
Taxes accrued 41,000,000
Other current liabilities (24,000,000)
Other liabilities 4,000,000
--------------
Total adjustments (26,000,000)
--------------
Net cash provided by operating activities 68,000,000
Cash Flows from Investing Activities:
Capital expenditures (94,000,000)
Cash paid for acquisitions (21,000,000)
Issuance of notes receivable --
Repayments on notes receivable 1,000,000
Proceeds from the sale of assets 3,000,000
Cash paid in relation to disposition (12,000,000)
--------------
Net cash provided by investing activities (123,000,000)
Cash Flows from Financing Activities:
Proceeds from issuance of debt 266,000,000
Repayment of long-term debt (192,000,000)
Payment dividends to minority interests (8,000,000)
Repayment of short-term debt (11,000,000)
Change in debt service reserve fund (46,000,000)
--------------
Net cash from financing activities 9,000,000
Exchange rate effect on cash --
--------------
Net decrease in cash (46,000,000)
Cash, beginning of period 1,587,000,000
--------------
Cash, end of period $1,541,000,000
==============
A full-text copy of Mirant Corporation's Form 10-Q Report is
available at no charge at:
http://sec.gov/Archives/edgar/data/1010775/000110465904034227/a04-12813_110q.htm
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- together with its direct and indirect
subsidiaries, generate, sell and deliver electricity in North
America, the Philippines and the Caribbean. Mirant Corporation
filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex.
03-46590). Thomas E. Lauria, Esq., at White & Case LLP, represent
the Debtors in their restructuring efforts. When the Company filed
for protection from their creditors, they listed $20,574,000,000
in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News,
Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000)
OWENS CORNING: Reports $94 Million of Net Income in 3rd Quarter
---------------------------------------------------------------
Owens Corning (OTC: OWENQ) reported financial results for the
quarter ended Sept. 30, 2004.
For the third quarter, the company posted net sales of
$1.541 billion, an increase of 14 percent compared to net sales of
$1.349 billion for the same period in the prior year. Net income
for the quarter rose 71 percent, to $94 million, compared to net
income of $55 million for the third quarter of 2003. Net income
for 2004 included a $16 million pre-tax gain recorded for the
reversal of accrued interest as the result of the settlement of
certain guaranteed subsidiary debt.
Owens Corning reported income from operations of $153 million for
the quarter, including a Chapter 11-related credit of $5 million
and a credit for asbestos-related insurance recoveries of $3
million. For the third quarter of 2003, the company reported
income from operations of $104 million, including $5 million of
Chapter 11-related charges and a $1 million other charge as the
result of a contractual post-closing adjustment to the selling
price of the Company's metal systems business.
Owens Corning ended the quarter with a cash balance of $822
million.
"For the second quarter in a row, Owens Corning achieved record
sales as we continued to see strong demand in all of our major
markets," said Dave Brown, Owens Corning's chief executive
officer. "With our results for the last two quarters, we are
entering into the fourth quarter with momentum and we expect to
achieve the aggressive goals we set for the company for the
year."
A full-text copy of Owens Corning's Form 10-Q report is available
for free at the Securities and Exchange Commission at:
http://www.sec.gov/Archives/edgar/data/75234/000119312504187915/d10q.htm
Owens Corning And Subsidiaries
Consolidated Balance Sheet
As of September 30, 2004
(In millions of dollars)
ASSETS
Current Assets:
Cash and cash equivalents $822
Receivables 676
Inventories 436
Other current assets 43
---------
Total Current Assets 1,977
Other Assets:
Restricted cash - asbestos and insurance-related 167
Restricted cash, securities and other - Fibreboard 1,413
Deferred income taxes 1,112
Pension-related assets 507
Goodwill 193
Investments in affiliates 74
Other non-current assets 164
---------
Total other 3,630
Plant and Equipment:
Land 78
Buildings and leasehold improvements 789
Machinery and equipment 3,247
Construction in progress 98
---------
4,212
Less - Accumulated depreciation (2,252)
---------
Net plant and equipment 1,960
---------
Total Assets $7,567
=========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Accounts payable and accrued liabilities $836
Short-term debt 11
Long-term debt - current portion 12
---------
Total Current Liabilities 859
Long-term debt 64
Other employee benefits liability 701
Pension plan liability 407
Other Liabilities 200
---------
Total Other Liabilities 1,308
Liabilities subject to compromise 9,268
Company-Obligated Securities of Entities
Holding Solely Parent Debentures 200
Minority Interest 46
Stockholders' Deficit:
Common stock 6
Additional paid-in capital 690
Deficit (4,519)
Accumulated other comprehensive loss (354)
Other (1)
---------
Total stockholders' deficit (4,178)
---------
Total Liabilities And Stockholders' Deficit $7,567
=========
Owens Corning And Subsidiaries
Consolidated Statement of Income (Loss)
Three Months Ended September 30, 2004
(In millions of dollars)
Net Sales $1,541
Cost Of Sales 1,244
---------
Gross margin 297
Operating Expenses:
Marketing and administrative expenses 131
Science and technology expenses 12
Restructure costs -
Chapter 11 related reorganization items (5)
Credit for asbestos litigation claims (3)
Other 9
---------
Total operating expenses 144
Income (Loss) From Operations 153
Interest expense (14)
---------
Income (Loss) Before Income Tax Expense 167
Income tax expense 71
---------
Income (Loss) Before Equity in Income (Loss) of
Affiliates 96
Minority interest (2)
Equity in net income of affiliates -
---------
NET INCOME (LOSS) $94
=========
Owens Corning And Subsidiaries
Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2004
(In millions of dollars)
Net Cash Flow From Operations
Net income (loss) $132
Reconciliation of net cash used in operations
Non-cash items:
Provision for depreciation and amortization 167
Provision (credit) for impairment of fixed assets --
Provision for deferred income taxes 81
Provision for pension and other employee benefits 88
Other 27
Increase in receivables (200)
Increase (decrease) in inventories (37)
Decrease in accounts payable 44
Pension fund contribution (225)
Payments for other employee benefits liability (23)
Increase in restricted cash, securities and other (1)
Proceeds from insurance for asbestos litigation claims (19)
Other 3
---------
Net cash flow from operations 59
Net Cash Flow From Investing:
Additions to plant and equipment (147)
Investments in subsidiaries, net of cash acquired (86)
Proceeds from the sale of affiliate or business 7
---------
Net cash flow from investing (226)
Net Cash Flow From Financing:
Other additions to long-term debt -
Other reductions to long-term debt (13)
Net increase in short-term debt -
Subject to compromise (5)
---------
Net cash flow from financing (18)
Effect of exchange rate changes on cash 2
Net decrease in cash and cash equivalents (183)
---------
Cash and cash equivalents at beginning of period 1,005
---------
Cash and cash equivalents at end of period $822
=========
Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com/-- manufactures fiberglass
insulation, roofing materials, vinyl windows and siding, patio
doors, rain gutters and downspouts. The Company filed for chapter
11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
represents the Debtors in their restructuring efforts. At
June 30, 2004, the Company's balance sheet shows $7.3 billion in
assets and a $4.3 billion stockholders' deficit. (Owens Corning
Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
PACIFIC GAS: Posts $248 Million of Net Income in Third Quarter
--------------------------------------------------------------
A full-text copy of Pacific Gas and Electric Company's third
quarter results on Form 10-Q is available for free at the
Securities and Exchange Commission at:
http://sec.gov/Archives/edgar/data/75488/000007548804000007/pge10q_q304.htm
Pacific Gas and Electric Company
Unaudited Consolidated Balance Sheets
At September 30, 2004
(in millions)
ASSETS
Current Assets:
Cash and cash equivalents $980
Restricted cash 2,004
Accounts receivable:
Customers (net of allowance for
doubtful accounts) 1,958
Related parties 3
Regulatory balancing accounts 849
Inventories:
Gas stored underground and fuel oil 226
Materials and supplies 127
Prepaid expenses and other 53
---------
Total current assets 6,200
Property, Plant and Equipment:
Electric 21,193
Gas 8,467
Construction work in progress 417
---------
Total property, plant and equipment 30,077
Accumulated depreciation and decommissioning (11,377)
---------
Net property, plant and equipment 18,700
Other Non-current Assets:
Regulatory assets 6,635
Nuclear decommissioning funds 1,539
Other 997
---------
Total other non-current assets 9,171
---------
TOTAL ASSETS $34,071
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities Not Subject to Compromise:
Current Liabilities:
Long-term debt, classified as current $457
Current portion of rate reduction bonds 290
Accounts payable:
Trade creditors 484
Disputed claims 2,142
Related parties 33
Regulatory balancing accounts 464
Other 423
Interest payable 383
Income taxes payable 131
Deferred income taxes 253
Other 817
---------
Total current liabilities 5,877
Non-current Liabilities:
Long-term debt 7,844
Rate reduction bonds 657
Regulatory liabilities 3,980
Asset retirement obligations 1,280
Deferred income taxes 3,567
Deferred tax credits 122
Preferred stock with redemption provisions 122
Other 19,308
---------
Total non-current liabilities 19,286
Liabilities Subject to Compromise:
Financing debt -
Trade creditors -
---------
Total liabilities subject to compromise -
Commitments and Contingencies -
Shareholders' Equity
Preferred Stock With Mandatory Redemption Provisions:
Non-redeemable, 5% to 6%,
outstanding 5,784,825 shares 145
Redeemable, 4.36% to 7.04%, outstanding 5,973,456 149
Common stock, $5 par value, authorized
800,000,000 shares, issued 321,314,760 shares 1,606
Common stock held by subsidiary, at cost, 19,481,213 (475)
Additional paid-in capital 2,040
Reinvested earnings 5,424
Accumulated other comprehensive loss (3)
---------
Total Shareholders' Equity 8,886
---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $34,071
=========
Pacific Gas and Electric Company
Unaudited Consolidated Statements of Operations
Three months ended September 30, 2004
(in millions)
Operating Revenues:
Electric $2,042
Natural gas 581
---------
Total operating revenues 2,623
Operating Expenses:
Cost of electricity 792
Cost of natural gas 239
Operating and maintenance 671
Recognition of regulatory assets -
Depreciation, amortization, and decommissioning 405
Reorganization professional fees and expenses -
---------
Total operating expenses 2,107
---------
Operating Income 516
Reorganization interest income -
Interest income 11
Interest expense (non-contractual interest of
$31 million in 2004 and $99 million in 2003) (141)
Other income, net 14
---------
Income Before Income Taxes 400
Income tax provision 152
---------
Income Before Cumulative Effect of
Changes in Accounting Principles 248
Cumulative Effect of changes in
acctg principles, net -
---------
Net Income $248
=========
Pacific Gas and Electric Company
Unaudited Consolidated Statements of Cash Flows
Nine months ended September 30, 2004
(in millions)
Cash Flows From Operating Activities:
Net income (loss) $3,735
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation, amortization, and decommissioning 1,054
Recognition of regulatory assets (4,900)
Deferred income taxes and tax credits, net 2,395
Other deferred charges and non-current liabilities (121)
Gain on sale of assets (18)
Cumulative effect of a change in acctg principle -
Net effect of changes in operating assets & liabilities:
Restricted cash 150
Accounts receivable 42
Inventories (61)
Accounts payable 77
Accrued taxes 87
Regulatory balancing accounts, net (323)
Other working capital 285
Payments authorized by the Bankruptcy Court on
amounts classified as liabilities
subject to compromise (1,022)
Other, net 28
---------
Net cash provided by operating activities 1,408
Cash Flows From Investing Activities:
Capital expenditures (1,110)
Proceeds from sale of assets 28
Increase in restricted cash (1,751)
Other, net (50)
---------
Net cash used by investing activities (2,883)
Cash Flows From Financing Activities:
Net proceeds from issuance of long-term debt 7,346
Long-term debt matured, redeemed, or repurchased (7,552)
Rate reduction bonds matured (213)
Dividends paid (88)
Preferred stock with
mandatory redemption provisions redeemed (15)
Other, net (2)
---------
Net cash provided (used) by financing activities (524)
Net change in cash and cash equivalents (1,999)
Cash and cash equivalents at January 1, 2004 2,979
---------
Cash and cash equivalents at September 30, 2004 $980
=========
Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly owned
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States. The Company filed for Chapter 11 protection on April 6,
2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes,
Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq.,
at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the
Debtors in their restructuring efforts. On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts. Pacific Gas and Electric emerged from chapter 11
protection on April 12, 2004, paying all creditors 100 cents-on-
the-dollar plus post-petition interest. (Pacific Gas Bankruptcy
News, Issue No. 86; Bankruptcy Creditors' Service, Inc.,
215/945-7000)
PARMALAT: Finanziaria Reports September 2004 Financial Results
--------------------------------------------------------------
Parmalat Finanziaria SpA in Extraordinary Administration
communicates the financial results of the Parmalat Group as of
September 30, 2004.
A number of the non-Italian operations of the Group
identified in previous months as subject to "Special Bankruptcy
Proceedings" (for example, USA Dairy, Brazil, Chile, EVH) and
certain financial companies (for example, Parmalat Capital
Finance) are currently subject to certain restrictions on their
management as a result of local bankruptcy proceedings, with the
result that these operations are effectively outside the control
of Parmalat Finanziaria SpA in Extraordinary Administration. For
this reason, the Group no longer consolidates these companies on
a line-by-line basis, choosing instead to value them by the
equity method. This approach will be followed while the Group
reviews and verifies any potential obligations that Parmalat
Finanziaria SpA in Extraordinary Administration may have based on
the laws of the countries where the companies in question are
located, and any guarantees provided to their lenders.
More specifically: USA Dairy (Parmalat USA Corp., Farmland
Dairies, Milk Products of Alabama), which handles the Group's
milk and dairy products operations in the United States, has
filed for Chapter 11 bankruptcy protection; two Brazilian
companies (Parmalat Brasil and Parmalat Partecipacoes) have
successfully filed under a local proceeding called Concordata,
which applies to their subsidiaries as well; the Chilean business
has also filed for protection locally ; EVH, a company
incorporated in Canada, has been granted creditor protection
under the Companies' Creditors Arrangement Act; Parmalat Capital
Finance has been placed in liquidation by the local court. This
group of companies also includes Eurofood IFSC, currently the
object of a dispute with Irish judicial authorities who allege
that Italian Extraordinary Administration proceedings cannot be
applied to this company.
Pro forma data for the previous year, reflecting the current
financial composition of the Group and allowing like-for-like
comparisons with the data in the current fiscal year:
Financial Highlights
Cumulative Through September
(in EUR millions)
Revenues
--------------------------------
Previous Previous year Current
year Pro-Forma year
-------- ------------- -------
Core Activities 2,776.4 2,776.4 2,722.2
Non Core Activities 1,289.3 557.6 433.0
-------- ------------- -------
Total 4,065.7 3,333.9 3,155.2
======== ============= =======
EBITDA
--------------------------------
Previous Previous year Current
year Pro-Forma year
-------- ------------- -------
Core Activities 162.1 162.1 192.9
Non Core Activities (54.2) (34.0) 12.8
-------- ------------- -------
Total 107.9 128.1 205.8
======== ============= =======
% of Revenues
--------------------------------
Previous Previous year Current
year Pro-Forma year
-------- ------------- -------
Core Activities 5.8 5.8 7.1
Non Core Activities (4.2) (6.1) 3.0
-------- ------------- -------
Total 2.7 3.8 6.5
======== ============= =======
Third Quarter
(in EUR millions)
Revenues
--------------------------------
Previous Previous year Current
year Pro-Forma year
-------- ------------- -------
Core Activities 956.1 956.1 901.8
Non Core Activities 420.3 125.4 124.7
-------- ------------- -------
Total 1,376.4 1,081.4 1,026.5
======== ============= =======
EBITDA
--------------------------------
Previous Previous year Current
year Pro-Forma year
-------- ------------- -------
Core Activities 46.7 46.7 61.1
Non Core Activities (12.4) (6.4) (1.1)
-------- ------------- -------
Total 34.3 40.3 60.1
======== ============= =======
% of Revenues
--------------------------------
Previous Previous year Current
year Pro-Forma year
-------- ------------- -------
Core Activities 4.9 4.9 6.8
Non Core Activities (3.0) (5.1) (0.9)
-------- ------------- -------
Total 2.5 3.7 5.9
======== ============= =======
* The Core Businesses include beverages (milk and fruit
juices) and milk-based products, sold under some 30 brand
names (global and strong local brands) primarily in
high-potential countries where there is sustained demand
for healthy lifestyle products, consumers are willing to
pay a premium price for Parmalat brands, and there is
access to leading-edge technologies.
** The Non-core Businesses are those that are located in
countries or engaged in activities that are not
strategically significant and have been earmarked for
divestiture.
Core Businesses
The Group's Core Businesses had revenues of EUR2,722.2 million in
the first nine months of 2004, down slightly (-2.0%) from the
EUR2,776.4 million booked in the same period last year, but EBITDA
increased to EUR192.9 million, or 19.0% more than the
EUR162.1 million earned in the nine months ended September 30,
2003.
This improved operating performance is largely the result of
successful marketing initiatives and programs implemented to cut
operating costs and overheads, which offset the negative impact
of lower unit sales.
The operating data are before expenses related to the
extraordinary administration proceedings (which represents an
extraordinary event). The accrued portion attributable to the
first nine months of 2004 amounts to about EUR55.0 million.
Revenues for the third quarter of 2004 amounted to EUR901.8
million, down 5.7% from the same period a year ago (EUR956.1
million). During the same three months, EBITDA increased by
30.8%, rising from EUR46.7 million to EUR61.1 million.
An analysis of the Group's performance in the main geographic
regions in which it operates is provided:
-- Italy
In the first nine months of 2004, revenues decreased to
EUR1,029.1 million, or 8.7% less than the EUR1,126.6
million reported as of September 30, 2003.
Revenue shortfalls are being accompanied by increases in
EBITDA, which grew from EUR65.7 million in the first nine
months of 2003 to EUR66.6 million this year. The ratio
of EBITDA to net revenues also improved, rising from 5.8%
to 6.5%.
In the third quarter of 2004, net revenues and EBITDA
totaled EUR337.1 million and EUR17.1 million (5.1% of
revenues), respectively, compared with EUR383.9 million
and EUR23.2 million (6.0% of revenues), respectively.
The milk and fresh dairy products operations (yogurt
especially) posted the best cumulative results,
confirming that the positive trend of previous months is
continuing. Compared with other areas of business,
these operations have experienced a smaller decrease in
unit sales and benefited from deep cuts in promotional
and advertising expenses, and overheads. On a less
positive note, the results reported by the fruit juice
operations for the third quarter of 2004 were lower than
in the same period last year, due to the negative impact
of less favorable weather conditions. Other negative
factors were the increase in raw materials costs,
attributable in part to higher oil prices, and the
greater relative weight of fixed manufacturing costs,
which were unchanged in absolute terms compared with a
year ago. The Group is implementing streamlining
programs to address this issue.
During the latter part of the third quarter, the Group
resumed its advertising programs (Kyr and Zymil
campaigns) and promotional initiatives (Eurolat
products), which are expected to have a positive impact
and provide fresh momentum to customer demand in the
fourth quarter of 2004.
-- Spain
Revenues for the first nine months of 2004 totaled
EUR172.9 million, or 2.5% less than the EUR177.4 million
reported a year earlier. EBITDA were also down,
decreasing from EUR17.7 million to EUR12.3 million.
In the third quarter of 2004, revenues and EBITDA
amounted to EUR58.6 million (EUR61.9 million in 2003) and
EUR4.4 million (EUR6.4 million in 2003), respectively.
A steady increase in the cost of milk, which has been
rising since the beginning of the year and could not be
passed on fully to customers, and higher prices paid for
plastics, especially in the third quarter, are the main
reasons for the decrease in EBITDA, compared with the
first nine months of 2003. A reduced contribution from
sales of seasonal products (Royne-branded ice-cream, milk
shakes and almond-flavored beverages), which were
severely affected by cooler summer weather (compared with
2003) and a sharp drop in tourist flows, was also a
contributing factor. Lastly, price competition was
especially strong, yogurt sales were affected by
aggressive promotions from competitors with a global
reach, and intense television advertising by competitors
had an impact on the flavored milk segment.
In the flavored milk business, the Spanish operations
increased production for private labels, a business that,
while less profitable, provides these operations with
coverage for their fixed costs and enables them to
maintain high sales volumes.
-- South Africa
Revenues for the first nine months of 2004 grew to
EUR178.3 million, up 29.8% compared with the EUR137.4
million reported in the same period a year ago.
EBITDA followed a similar trend, rising from EUR11.9
million to EUR14.2 million (+19.2%).
The improvement in cumulative revenues and EBITDA,
compared with the first nine months of 2003, was made
possible by several factors: the acquisition of new
brands (Simonsberg), the growing strength of the Parmalat
brand in the yogurt and cheese segments, sharply higher
unit sales of UHT milk and the positive impact of the
appreciation of the South African rand versus the euro
(+7.2%). In addition, less profitable products such as
bulk cheese helped boost unit sales.
In the third quarter of 2004, revenues increased to
EUR65.2 million (EUR51.0 million in 2003), but EBITDA
declined to EUR4.9 million (EUR5.2 million in 2003), due
mainly to a less favorable product mix (increased
shipments of bulk cheese and pasteurized milk) and higher
prices paid for raw materials.
-- Venezuela
The devaluation of the bolivar versus the euro continued
during the month of September (-26.5% compared with
September 2003), despite the fact that the outcome of the
August referendum helped to reduce the political and
social instability that has characterized this country.
Cumulative revenues for the first nine months of 2004
declined to EUR110.7 million, or 26.1% less than the
EUR149.7 million booked in the first three quarters of
2003. The same was true for EBITDA, which were down
both in absolute terms (from EUR18.3 million to EUR3.8
million) and as a percentage of revenues (from 12.2% to
3.4%).
The failure to renew credit lines for importation
powdered milk, the social policies pursued by the
Venezuelan government (establishment of a Ministry of
Nutrition responsible for importing and distributing
essential staples, which include "basic" powdered milk),
increases in the prices paid domestically for raw
materials that could not be passed on to consumers, and
lower unit sales of fruit juices are the reasons for the
drastic decrease in revenues and EBITDA.
The Group responded to this development by implementing a
process designed to refocus the Venezuelan operations,
beginning with the restructuring of the local operating
unit.
Revenues for the third quarter of 2004 totaled EUR35.9
million (EUR53.2 million in 2003) and EBITDA fell to
EUR1.7 million (EUR4.8 million in 2003).
-- Canada
Cumulative revenues increased to EUR849.3 million,
compared with EUR841.7 million in the first nine months
of 2003.
The improvement in net revenues produced impressive gains
in EBITDA, which rose 15.5% in absolute terms (EUR55.9
million, compared with EUR48.4 million for the nine
months ended September 30, 2003) and 0.8 point as a
percentage of revenues (from 5.8% to 6.6%). A strong
performance in basic ingredients and cheese, a reduction
in promotional and advertising expenses and overheads, a
reorganization of manufacturing processes, and a
streamlining of the product portfolio (about 300 items
have thus far been eliminated) account for this positive
performance.
In the third quarter of 2004, the Canadian operations had
revenues of EUR291.7 million (EUR295.5 million in 2003),
generating EBITDA of EUR20.3 million (EUR12.7 million
last year).
-- Australia
Owing in part to the appreciation of the Australian
dollar versus the euro (+4.7% compared with the average
rate as of September 2003), revenues grew to EUR277.6
million, up from EUR269.5 million in the first nine
months of 2003. Over the same period, EBITDA increased
from EUR19.2 million to EUR22.6 million (+17.7%).
Other factors that contributed to these improved results
include: higher unit sales of milk (especially
pasteurized milk) and yogurt, a reduction in overhead and
promotional expenses, a more effective raw materials
procurement policy and the implementation of streamlining
programs.
In the third quarter of 2004, revenues totaled EUR95.0
million (EUR94.2 million in 2003) and EBITDA increased to
EUR8.8 million (EUR6.5 million in 2003).
Non-core Businesses
The Group's Non-core Businesses reported revenues of
EUR433.0 million, or 22.3% less than the EUR557.6 million booked
in the first nine months of 2003.
After the restatement of the result reported at June 30, 2004
stemming from a change in the treatment of certain items
attributed to Parma F.C. (which totaled EUR26.4 million), EBITDA
were positive by EUR12.8 million, compared with a loss of EUR34.0
million in the first nine months of 2003.
In the first quarter of 2004, revenues totaled EUR124.7 million
(EUR125.4 million in 2003) and EBITDA were negative by
EUR1.1 million (negative EBITDA of EUR6.4 million in 2003).
The main reasons for the year-over-year improvement in cumulative
EBITDA are the restatement and programs implemented by certain
Italian businesses and the U.S. baked goods operations
(USA Bakery).
Italy
The Divisions of Parmalat SpA that have been designated as
Non-core Businesses had lower revenues than in the first nine
months of 2003, but EBITDA improved (loss narrowed to EUR4.3
million as of September 30, 2004, compared with a loss of EUR11.6
million a year earlier).
The decision to discontinue the water business and drastic
cuts in advertising and promotion for baked goods and fruit
juices account for this improvement.
USA Bakery
The baked goods operations had revenues of EUR210.8 million,
or 17.6% less than the EUR255.8 million reported for the nine
months ended September 30, 2003, owing in part to a sharp decline
in the value of the U.S. dollar, which fell by 10.3% over the
same period of time.
Overall, the negative impact of lower unit sales and higher
raw materials prices was offset by targeting promotional
investments more effectively, reorganizing the manufacturing
operations (the Bollingbrook facility was closed in July) and
cutting overheads. As a result, EBITDA, while still negative (-
EUR7.0 million) showed a dramatic improvement over the figure as
of September 30, 2003 (-EUR13.7 million).
NET FINANCIAL POSITION
Highlights (in EUR millions)
Balance
Balance as at Balance Balance Balance
as at 12/31/03 as at as at as at
12/31/03 Pro-Forma 06/30/04 08/31/04 09/30/04
-------- --------- -------- -------- --------
Short term
financial (121.4) (104.7) (130.5) (126.0) (173.9)
assets broken
down as:
Financial assets
not held as
fixed assets (20.9) (20.9) (5.4) (1.0) (0.8)
Liquid assets (100.5) (83.8) (125.1) (125.0) (173.1)
Financial accrued
income and prepaid
expenses ((incl.
intra-Group) (61.9) (57.2) (55.0) (31.0) (28.5)
------- --------- -------- -------- --------
Total
short-term
financial
assets (183.3) (161.9) (185.5) (157.0) (202.4)
======= ========= ======== ======== ========
Financial
debts 13,457.5 11,402.6 11,408.0 11,447.2 11,444.8
Financial
accrued
expenses &
deferred
income (incl.
intra-Group) 256.2 200.8 246.6 229.3 231.1
-------- --------- -------- -------- --------
Total financial
liabilities 13,713.7 11,603.4 11,654.6 11,676.5 11,675.9
Indebtedness
owed to lenders
outside the Group/
(Financial assets)
of companies
consolidated
line-by-line 13,530.4 11,441.5 11,469.1 11,519.5 11,473.5
Indebtedness
owed by companies
consolidated
line-by-line
to companies
valued by the
equity method - - 750.5 750.5 750.5
Indebtedness/
Financial
assets)
of companies
consolidated
line-by-line 13,530.4 11,441.5 12,219.6 12,270.0 12,224.0
Financial
receivables
owed to the
companies
consolidated
line by line
by companies
valued by the
equity method - - (750.5) (750.5) (750.5)
Indebtedness
owed to lenders
outside
the Group/
(Financial
assets) of
companies valued
by the equity
method 49.4 2,138.3 2,442.3 2,442.3 2,442.3
-------- --------- -------- -------- --------
Total
indebtedness/
(financial
assets) 13,579.8 13,579.8 13,911.4 13,961.8 13,915.8
======== ========= ======== ======== ========
The Group's net financial position at September 30, 2004 shows an
increase in liquid assets held by Parmalat SpA and the Canadian
operations.
The combined indebtedness owed to lenders outside the Group
by companies valued by the equity method totaled EUR2,442.3
million. Because some of these borrowings are secured by
guarantees provided Parmalat and Parmalat Finanziaria in the
amount of EUR1,701.7 million, a reserve for risks of equal amount
has been recognized in the consolidated financial statements.
The consolidated financial statements also show indebtedness of
EUR750.5 million owed by the Group to companies in special
proceedings who are not consolidated line by line.
As of [October 29, 2004], no amount has been drawn from the
EUR105.8-million line of credit provided by a pool of banks on
March 4, 2004.
A breakdown of the net indebtedness owed to lenders outside
the Group by companies consolidated line by line:
(in EUR millions)
Balance
as at Balance Balance Balance
12/31/03 as at as at as at
Pro-Forma 06/30/04 08/31/04 09/30/04
--------- -------- -------- --------
Companies in EA
subject to proposed
composition with
creditors 10,055.3 10,084.0 10,087.3 10,064.1
Other companies in EA 56.9 42.8 54.5 58.2
Other companies 1,329.3 1,342.3 1,377.7 1,351.2
--------- -------- -------- --------
Total indebtedness/
(financial assets) 11,441.5 11,469.1 11,519.5 11,473.5
========= ======== ======== ========
Companies in Extraordinary Administration
The net indebtedness incurred by companies under extraordinary
administration toward lenders outside the Group prior to their
becoming eligible for extraordinary administration is all short-
term, since all of these companies are in default of the covenants
of the respective loan agreements.
A noteworthy development is the increase in liquid assets held by
the companies included in the Proposal of Composition with
Creditors, which rose from EUR24.0 million at December 31, 2003 to
EUR80.7 million at September 30, 2004.
Other Companies
At September 30, 2004, the remaining operating and financial
companies consolidated line by line that are not included in the
extraordinary administration proceedings had net indebtedness
toward lenders outside the Group of EUR1,351.2 million (including
EUR729.3 million in long-term debt), compared with EUR1,329.3
million at December 31, 2003.
On September 30, 2004, the companies belonging to SBU Africa
completed the renegotiation of their indebtedness. Other
companies, including those in Portugal, are currently
renegotiating their indebtedness in order to restructure it.
Principal Companies in Extraordinary Administration
Financial highlights of the principal Italian companies
under extraordinary administration:
Parmalat Finanziaria SpA
(Amounts in millions of Euros)
(in EUR millions)
Balance Balance Balance Balance
as at as at as at as at
12/31/03 06/30/04 08/31/04 09/30/04
-------- -------- -------- --------
Short-term
financial assets (140.8) (140.0) (18.6) (18.3)
broken down as:
Intra-Group loans
receivable (138.8) (138.8) (18.1) (17.1)
Financial assets
not held as
fixed assets (2.0) (0.0) - -
Liquid assets (0.0) (1.1) (0.5) (1.2)
Financial accrued income
and prepaid expenses
(including intra-Group) (0.6) - - (0.1)
-------- -------- -------- --------
Total short-term
financial assets (141.4) (140.0) (18.6) (18.4)
======== ======== ======== ========
Financial liabilities
(including intra-Group) 1,269.9 1,272.9 1,274.4 1,277.2
broken down as:
Intra-Group
loans payable 1,007.8 1,010.9 1,012.4 1,015.2
Other financial
liabilities 262.1 262.0 262.0 262.0
Financial accrued expenses
and deferred income
(including intra-Group) 4.8 4.7 4.6 4.6
-------- -------- -------- --------
Total financial
liabilities 1,274.7 1,277.6 1,279.0 1,281.8
-------- -------- -------- --------
Total indebtedness/
(financial assets) 1,133.3 1,137.6 1,260.4 1,263.4
======== ======== ======== ========
In September, intra-Group indebtedness increased by EUR2.8 million
as a result of a loan received from Parmalat SpA in
Amministrazione Straordinaria.
Parmalat SpA
(Amounts in millions of Euros)
(in EUR millions)
Balance Balance Balance Balance
as at as at as at as at
12/31/03 06/30/04 08/31/04 09/30/04
-------- -------- -------- --------
Short-term
financial assets (54.3) (61.7) (57.4) (64.9)
broken down as:
Intra-Group
loans receivable (28.0) (38.6) (36.8) (33.9)
Financial assets not
held as fixed assets (19.7) - - -
Liquid assets (6.6) (23.2) (20.6) (31.0)
Financial accrued income
and prepaid expenses
(including intra-Group) 0.0 - 0.0 -
-------- -------- -------- --------
Total short-term
financial assets (54.3) (61.7) (57.4) (64.9)
======== ======== ======== ========
Financial liabilities
(including intra-Group) 4,149.0 4,144.1 3,891.4 3,883.6
broken down as:
Intra-Group
loans payable 1,266.2 1,266.2 1,013.2 1,005.5
Other financial
liabilities 2,882.8 2,877.9 2,878.2 2,878.2
Financial accrued expenses
and deferred income
(including intra-Group) 0.0 - 0.0 -
-------- -------- -------- --------
Total financial
liabilities 4,149.0 4,144.1 3,891.3 3,883.6
-------- -------- -------- --------
Total indebtedness/
(financial assets) 4,094.7 4,082.4 3,833.9 3,818.7
======== ======== ======== ========
Changes compared with the positions at August 31, 2004 include a
decrease in intra-Group indebtedness following the netting out of
EUR7.7 million in debt owed by Centrale del Latte di Roma SpA,
which had an equivalent impact on intra-Group loans receivable.
The balance of intra-Group loans receivable also changed, due to
the granting of additional intra-Group loans to Parmalat
Finanziaria SpA in Amministrazione Straordinaria (EUR2.8 million),
Boschi Luigi & Figli SpA (EUR1.0 million) and Latte Sole SpA
(EUR1.0 million). Liquid assets increased due to the normal cash
flow from operations.
Eurolat SpA
(Amounts in millions of Euros)
(in EUR millions)
Balance Balance Balance Balance
as at as at as at as at
12/31/03 06/30/04 08/31/04 09/30/04
-------- -------- -------- --------
Short-term
financial assets (13.6) (23.2) (19.3) (18.3)
broken down as:
Intra-Group
loans receivable - - - -
Financial assets not
held as fixed assets - - - -
Liquid assets (13.6) (23.2) (19.3) (18.3)
Financial accrued income
and prepaid expenses
(including intra-Group) - - (0.1) (0.1)
-------- -------- -------- --------
Total short-term
financial assets (13.6) (23.2) (19.4) (18.4)
======== ======== ======== ========
Financial liabilities
(including intra-Group) 191.9 189.3 190.1 190.1
broken down as:
Intra-Group
loans payable 45.8 45.8 45.8 45.8
Other financial
liabilities 146.1 143.5 144.4 144.4
Financial accrued expenses
and deferred income
(including intra-Group) 1.5 0.7 - -
-------- -------- -------- --------
Total financial
liabilities 193.4 190.0 190.1 190.1
-------- -------- -------- --------
Total indebtedness/
(financial assets) 179.7 166.8 170.8 171.7
======== ======== ======== ========
No change from a month earlier.
Lactis SpA
(Amounts in millions of Euros)
(in EUR millions)
Balance Balance Balance Balance
as at as at as at as at
12/31/03 06/30/04 08/31/04 09/30/04
-------- -------- -------- --------
Short-term
financial assets (0.4) (3.7) (2.5) (3.6)
broken down as:
Intra-Group
loans receivable - - - -
Financial assets not
held as fixed assets - - - -
Liquid assets (0.4) (3.7) (2.5) (3.6)
Financial accrued income
and prepaid expenses
(including intra-Group) (0.0) (0.0) (0.0) (0.0)
-------- -------- -------- --------
Total short-term
financial assets (0.4) (3.7) (2.5) (3.6)
======== ======== ======== ========
Financial liabilities
(including intra-Group) 20.5 19.1 19.1 19.1
broken down as:
Intra-Group
loans payable 8.6 8.6 8.6 8.6
Other financial
liabilities 11.9 10.5 10.5 10.5
Financial accrued expenses
and deferred income
(including intra-Group) 0.0 - - 0.0
-------- -------- -------- --------
Total financial
liabilities 20.5 19.1 19.1 19.1
-------- -------- -------- --------
Total indebtedness/
(financial assets) 20.2 15.4 16.6 15.5
======== ======== ======== ========
Liquid assets increased to EUR3.6 million, up from EUR2.5 million
a month earlier.
Significant Events during August and September
September 10 Publication of an invitation to submit bids
to buy the real estate complex owned by
Eurolat SpA in Amministrazione Straordinaria
that is located in the municipalities of
Lodi, Montanaso, Lombardo and Tavazzano con
Villavesco.
September 18 Publication of the requirements for filing
objections to the list of creditors published
by the Extraordinary Commissioner and for
filing responses to these objections.
September 21 Approval by the Board of Director of Parmalat
SpA (Assumptor), acting for the purpose of
implementing the Restructuring Plan of the
Parmalat Group approved by the Ministry of
Production Activities acting in concert with
the Ministry of Agricultural and Forest
Policies, of a resolution to prepare a draft
investment solicitation and prospectus for
listing the Company's shares and warrants on
the online stock market operated by Borsa
Italiana.
September 30 Repayment of the indebtedness of Parmalat
Africa Ltd and Parmalat South Africa (Pty)
Ltd toward Bank of America with refinancing
provided by a top international bank.
September 30 Sale of a 65.74% interest in Parmalat
Dominicana SA by Curcastle Corporation NV to
PAR SA, a Dominican company that is a
minority stockholder of Parmalat Dominicana
SA, and to other parties represented by PAR
SA at a price of EUR6.6 million. The price
was collected on October 6, 2004. Pursuant
to the sales agreement, the buyers agreed to
repay within two years the indebtedness owed
by Parmalat Dominicana SA to Parmalat Group
companies, which amounts to US$930,794. In
addition, Parmalat SpA in Amministrazione
Straordinaria and Parmalat Dominicana SA
executed a trademark licensing agreement.
This transaction, which was authorized by the
Italian Ministry of Production Activities,
acting with the input of the Oversight
Committee, provides a continuing revenue
stream for Parmalat SpA in Amministrazione
Straordinaria.
October 7 Filing by the Extraordinary Commissioner of a
complaint with the United States District
Court for the Western District of North
Carolina asking it to order Bank of America
and certain of its subsidiaries to pay
damages under various titles. The
Commissioner believes that the defendant
companies actively engaged in actions that,
over an extended period time, caused damages
to the Parmalat Group that are estimated at
the present time to be not less than US$10
billion.
October 14 Following approval by the Italian Ministry of
Production Activities, acting with the input
of the Oversight Committee of the
Extraordinary Administration proceedings,
acceptance of the settlement proposal put
forth on October 6, 2004 by Nextra Investment
Management -- Societa di gestione del
risparmio SpA and collection of the
settlement amount. This amount will be
allocated to the companies that are parties
to the settlement in accordance with the
instructions of the Oversight Committee and
with the approval of the Italian Ministry of
Production Activities.
SOLUTIA INC: Posts $18 Million of Net Loss in Third Quarter 2004
----------------------------------------------------------------
Solutia, Inc.
Condensed Consolidated Balance Sheet
As of September 30, 2004
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $92,000,000
Trade receivables, net 309,000,000
Miscellaneous receivables 90,000,000
Inventories 247,000,000
Prepaid expenses and other assets 38,000,000
-------------
Total current assets 776,000,000
Property, plant and equipment, net 841,000,000
Investments in affiliates 177,000,000
Goodwill 97,000,000
Identified intangible assets, net 42,000,000
Other assets 175,000,000
-------------
TOTAL ASSETS $2,108,000,000
=============
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable $158,000,000
Accrued liabilities 260,000,000
Short-term debt -
-------------
Total current liabilities 418,000,000
Long-term debt 559,000,000
Other liabilities 280,000,000
-------------
Total liabilities not subject to compromise 1,257,000,000
Liabilities subject to compromise 2,174,000,000
Total shareholders' deficit (1,323,000,000)
-------------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $2,108,000,000
=============
Solutia, Inc.
Condensed Consolidated Statement of Operations
Three Months Ended September 30, 2004
Net sales $677,000,000
Cost of goods sold 586,000,000
-------------
Gross profit 91,000,000
Marketing expenses 31,000,000
Administrative expenses 20,000,000
Technological expenses 7,000,000
Amortization expense -
-------------
Operating loss 33,000,000
Equity loss from affiliates (16,000,000)
Interest expense (21,000,000)
Other income, net 1,000,000
Loss on debt modification -
Reorganization items, net (14,000,000)
-------------
Loss before income tax expense (benefit) (17,000,000)
Income tax expense (benefit) 1,000,000
-------------
Loss from continuing operations (18,000,000)
Loss from discontinued operations, net of tax -
-------------
NET LOSS ($18,000,000)
=============
Solutia, Inc.
Condensed Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2004
Increase (decrease) in cash and cash equivalents
Operating Activities:
Net loss ($216,000,000)
Adjustments to reconcile to Cash From Operations:
Depreciation and amortization 95,000,000
Loss from discontinued operations, net of tax -
Amortization of deferred credits (30,000,000)
Restructuring expenses and other charges 139,000,000
Reorganization items, net -
Other, net 4,000,000
Changes in assets and liabilities:
Income and deferred taxes -
Trade receivables (28,000,000)
Inventories (7,000,000)
Accounts payable 80,000,000
Liabilities subject to compromise (47,000,000)
Other assets and liabilities 1,000,000
-------------
Cash used in operating activities (9,000,000)
Investing activities:
Property, plant and equipment purchases (32,000,000)
Acquisition and investment payments (36,000,000)
Other investing activities (1,000,000)
-------------
Cash provided by (used in) investing activities (69,000,000)
-------------
Financing activities:
Net change in short-term debt obligations (361,000,000)
Proceeds from long-term debt obligations 300,000,000
Net change in cash collateralized letters of credit 85,000,000
Deferred debt issuance costs (13,000,000)
Other financing activities -
-------------
Cash provided by (used in) financing activities 11,000,000
-------------
Increase (Decrease) in cash and cash equivalents (67,000,000)
Cash and cash equivalents:
Beginning of year 159,000,000
-------------
End of period $92,000,000
=============
A full-text copy of Solutia, Inc.'s Form 10-Q Report is available
for free at:
http://www.sec.gov/Archives/edgar/data/1043382/000106880004000628/solutiaq.txt
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Debtors filed for protection
from their creditors, they listed $2,854,000,000 in assets and
$3,223,000,000 in debts. (Solutia Bankruptcy News, Issue No. 26;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SOLUTIA INC: September 2004 Net Loss is at $1 Million
-----------------------------------------------------
Solutia Chapter 11 Debtors
Unaudited Statement of Consolidated Financial Position
As of September 30, 2004
ASSETS
Current Assets:
Cash $34,000,000
Trade Receivables, net 180,000,000
Account Receivables-Unconsolidated subsidiaries 52,000,000
Inventories 155,000,000
Other Current Assets 92,000,000
------------
Total Current Assets 513,000,000
Property, Plant and Equipment, net 706,000,000
Investments in Affiliates 489,000,000
Intangible Assets, net 102,000,000
Other Assets 122,000,000
-------------
TOTAL ASSETS $1,932,000,000
=============
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current Liabilities
Accounts Payable $131,000,000
Other Current Liabilities 167,000,000
-------------
Total Current Liabilities 298,000,000
Long-Term Debt 300,000,000
Other Long-Term Liabilities 231,000,000
-------------
Total Liabilities Not Subject to Compromise 829,000,000
Liabilities Subject to Compromise 2,281,000,000
Shareholders' Deficit (1,178,000,000)
-------------
TOTAL LIABILITIES & SHAREHOLDERS' DEFICIT $1,932,000,000
=============
Solutia Chapter 11 Debtors
Unaudited Consolidated Statement of Operations
For the Month Ended September 30, 2004
Total Net Sales $169,000,000
Total Cost Of Goods Sold 147,000,000
-------------
Gross Profit 22,000,000
Total MAT Expense 7,000,000
-------------
Operating Income 15,000,000
Equity Loss from Affiliates (9,000,000)
Interest Expense, net (4,000,000)
Other Income, net 4,000,000
Reorganization Items:
Professional fees (4,000,000)
Employee severance and retention costs (1,000,000)
-------------
Total Reorganization Items (5,000,000)
-------------
Loss Before Taxes (1,000,000)
Income Taxes -
-------------
NET LOSS ($1,000,000)
=============
USG CORP: Posts $16.5 Million Net Earnings in September 2004
------------------------------------------------------------
USG Corporation, et al.
Consolidated Balance Sheet 30-September-2004
__________________________ _________________
Assets:
Cash and cash equivalents $421,211,000
Marketable Securities 128,820,000
Restricted Cash 12,422,000
Receivables 407,533,000
Inventories 307,623,000
Income taxes receivable 19,600,000
Deferred income taxes 30,547,000
Other current assets 69,600,000
-------------
Total current assets 1,397,356,000
Property, plant and equipment, net 1,586,072,000
Marketable Securities 258,219,000
Deferred income taxes 135,447,000
Goodwill 41,201,000
Other assets 350,978,000
-------------
Total Assets $3,769,273,000
=============
Liabilities and Stockholders' Equity:
Accounts payable $214,760,000
Accrued expenses 191,968,000
Taxes on income 15,877,000
-------------
Total current liabilities 422,605,000
Other liabilities 427,744,000
Liabilities subject to compromise 2,238,647,000
Stockholders' Equity:
Common stock 4,998,000
Treasury stock (258,024,000)
Capital received in excess of par value 101,603,000
Accumulated other comprehensive income/(loss) 23,910,000
Retained earnings 807,790,000
-------------
Total stockholders' equity 680,277,000
-------------
Total Liabilities and Stockholders' Equity $3,769,273,000
=============
USG Corporation, et al. Month Ending
Consolidated Income Statement 30-September-2004
__________________________ _________________
Net sales $348,032,000
Cost of products sold 291,395,000
Selling and administrative expenses 22,405,000
Chapter 11 reorganization expenses 5,306,000
Interest expense 858,000
Interest income (141,000)
Other (income)/expense, net (181,000)
-------------
Earnings/(loss) before income taxes 28,390,000
Income taxes (benefit) 11,851,000
-------------
Net Earnings/(loss) $16,539,000
=============
Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes. The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094). David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones Day represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG
Bankruptcy News, Issue No. 75; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
USG CORP: Posts Record $1.2 Billion Net Sales in Third Quarter
--------------------------------------------------------------
USG Corporation (NYSE:USG), a leading building products company,
today reported third quarter 2004 net sales of $1.2 billion, a
record for any quarter in USG's history, and net earnings of $90
million. Net sales and net earnings increased $212 million and
$51 million, respectively, compared with the third quarter last
year. Diluted earnings per share for the third quarter of 2004
were $2.10, compared with $0.89 a year ago. Results were stronger
in all business segments, with record product shipments in the
domestic wallboard business, higher profits in the worldwide
ceilings business and double-digit percentage increases in sales
and profit in the distribution business.
"USG's growth strategies are succeeding," said William C. Foote,
USG Corporation Chairman, CEO and President. "Our solid
financial and operational performance thus far in 2004 reflects
both robust demand for our products and the success of our
strategies emphasizing the introduction of new products,
expansion of our distribution business and investment in new low-
cost manufacturing capacity. Our strategies, supported by over
$300 million in capital spending during the past three years, are
enabling us to grow along with our customers and increase
production efficiencies to help manage rising operating costs."
Foote continued, "Our results suggest that we are on the
right course with the right strategies to achieve long-term
growth at USG as we navigate a competitive and challenging
operating environment."
Net sales for the first nine months of 2004 were $3.3 billion,
versus net sales of $2.7 billion for the same period in 2003. Net
earnings for the first nine months nearly tripled to $227 million
compared with $76 million for that period last year. Net earnings
for the first nine months of 2003 include a non-cash, after-tax
charge of $16 million related to the adoption of a new accounting
standard on asset retirement obligations. Net earnings before the
cumulative effect of this accounting change for the first nine
months of 2003 were $92 million.
Diluted earnings per share for the first nine months of 2004
were $5.28, compared with 2003 nine months earnings of $1.75, or
$2.13 prior to [an accounting change].
North American Gypsum
USG's North American Gypsum business recorded net sales of
$708 million in the third quarter of 2004, an increase of $108
million over the same period a year ago. Operating profit more
than doubled to $125 million in the third quarter, compared with
$60 million in last year's third quarter.
United States Gypsum Company realized third quarter 2004 net
sales of $638 million and operating profit of $103 million.
These results compare favorably with net sales and operating
profit of $540 million and $43 million, respectively, in the
third quarter last year. The factors contributing to increased
profitability included higher selling prices for Sheetrockr Brand
gypsum wallboard and record shipments of gypsum wallboard and
complementary products.
U.S. Gypsum's nationwide average realized price of Sheetrock
Brand gypsum wallboard was $128.65 per thousand square feet
during the third quarter, compared with $101.83 in the third
quarter last year and $118.47 in the second quarter this year.
The higher third quarter selling prices reflect strong demand for
wallboard and wallboard industry capacity utilization rates that
exceeded 90 percent.
Demand for U.S. Gypsum's Sheetrock Brand gypsum wallboard
remained strong, as shipments were at a record level for any
third quarter in U.S. Gypsum's history. U.S. Gypsum shipped 2.73
billion square feet of wallboard, 1 percent higher than the
previous record of 2.70 billion square feet shipped in the third
quarter last year. For the first nine months of this year,
shipments totaled 8.24 billion square feet, up 6 percent from the
same period last year. Shipments are expected to remain at
relatively high levels through the remainder of 2004.
U.S. Gypsum's operating profit in the quarter was negatively
affected by higher manufacturing costs, especially raw materials
and energy costs. Prices paid for wastepaper used to produce the
facing and backing of gypsum wallboard were significantly higher
in the third quarter of 2004 compared with the third quarter last
year. The cost of natural gas (a major source of energy) was
also higher compared to last year's third quarter. These higher
costs were partially offset by improved production efficiencies.
The company continues to profitably grow its complementary
product lines. Shipments for DUROCK(R) Brand cement board
products and FIBEROCK(R) Brand gypsum fiber panels were the
highest for any quarter in U.S. Gypsum's history. Shipments of
SHEETROCK Brand joint treatment products were the highest of any
third quarter in the company's history. In September, the
company announced the start-up of a new state-of-the-art joint
treatment manufacturing line at the company's Gypsum, Ohio plant.
This additional capacity will enable the company to satisfy
growing demand for joint treatment products in the Northeast and
Great Lakes markets.
The gypsum business of Canada-based CGC Inc. reported third
quarter 2004 net sales of $73 million, which was $4 million
higher than last year's third quarter. Operating profit of $12
million increased $1 million from the same period a year ago.
Most of the improvement in results was due to the favorable
effect of currency translation, which was partially offset by
higher manufacturing costs for gypsum wallboard.
Worldwide Ceilings
USG's worldwide ceilings business recorded net sales of $168
million and operating profit of $14 million in the third quarter.
This compared with net sales and operating profit of $157 million
and $12 million, respectively, in the third quarter of 2003.
USG Interiors, USG's domestic ceilings business, reported
third quarter sales and operating profit of $118 million and $9
million, respectively. Net sales increased $5 million, while
operating profit declined $1 million compared with the third
quarter last year.
Increased sales at USG Interiors primarily reflect higher
selling prices for ceiling grid and tile. Higher energy and
steel costs, combined with lower shipments of ceiling grid,
contributed to the decrease in operating profit. Third quarter
ceiling grid shipments were lower following a surge in customer
purchases of grid during the first half of the year in
anticipation of reduced supply and higher grid prices associated
with a global shortage of steel. The cost of steel is expected
to continue to rise further during the fourth quarter, but at a
lesser rate than for the first nine months of the year.
USG International achieved operating profit of $4 million in
the third quarter, compared with break-even results for the same
period a year ago. The profit improvement was primarily due to
increased demand for ceiling grid in Europe and the favorable
effect of currency translation. Third quarter 2003 results also
included a $1 million writedown related to a previously closed
ceiling tile plant in Aubange, Belgium. Operating profit for the
ceilings business of Canada-based CGC Inc. was $1 million, a
decline of $1 million compared with the same period a year ago.
Building Products Distribution
L&W Supply Corporation, USG's building products distribution
business, reported third quarter 2004 net sales of $470 million
and operating profit of $31 million. Sales and operating profit
increased $129 million and $14 million, respectively, compared
with the same period a year ago. The improved results reflect
record shipments of gypsum wallboard and complementary products.
L&W's gypsum wallboard shipments increased 10 percent versus the
third quarter of 2003, and sales of complementary products were
up 43 percent.
Business Outlook
USG's outlook for the fourth quarter is favorable. The
residential market is expected to remain strong, although the
exceptional strength of the first nine months may abate somewhat
in the fourth quarter. Increasing mortgage interest rates may
affect the level of demand in both the new housing and
residential remodeling markets. The commercial construction
market, the principal market for USG's ceilings products, is
showing signs of improvement, but office vacancy rates remain at
very high levels. In addition, USG's businesses, like many
others, face ongoing cost pressures such as higher prices for
energy and raw materials and increased employee benefit costs.
Other Consolidated Information
Third quarter 2004 selling and administrative expenses totaled $82
million, an increase of $4 million versus the third quarter of
2003. The increase reflects higher employee benefit costs
(pension and medical insurance for active employees and
retirees) and higher levels of accruals for incentive
compensation associated with the attainment of profit goals.
Selling and administrative expenses totaled $238 million for the
first nine months of 2004, compared to $239 million for that
period last year. Selling and administrative expenses were 7
percent of net sales in both the third quarter and first nine
months of 2004, down from 8 percent and 9 percent of net sales in
the third quarter and first nine months of 2003, respectively.
Third quarter interest expense of $2 million was unchanged from
the same period a year ago. Under AICPA Statement of Position
90-7, "Financial Reporting by Entities in Reorganization
under the Bankruptcy Code," virtually all of USG's outstanding
debt is classified as liabilities subject to compromise, and
interest expense on this debt has not been accrued or recorded
since USG's bankruptcy filing. Contractual interest expense not
accrued or recorded on pre-petition debt totaled $18 million and
$53 million in the third quarter and first nine months of 2004,
respectively. From the date of USG's bankruptcy filing through
September 30, 2004, contractual interest expense not accrued or
recorded on pre-petition debt totaled $239 million.
For the third quarter, USG's Chapter 11 reorganization expenses of
$4 million reflected $7 million of legal and financial advisory
fees, partially offset by $3 million of interest income earned by
the USG entities in Chapter 11. Under SOP 90-7, interest income
on USG's bankruptcy-related cash is offset against Chapter 11
reorganization expenses.
As of September 30, 2004, USG had $1.1 billion of cash, cash
equivalents, restricted cash and marketable securities on a
consolidated basis, up from $973 million as of June 30, 2004, and
$947 million as of December 31, 2003. Capital expenditures for
the third quarter and first nine months of 2004 were $33 million
and $80 million, respectively. Expenditures for the same periods
last year were $25 million and $61 million, respectively.
Chapter 11 Reorganization
USG Corporation and its principal domestic subsidiaries filed
voluntary petitions for reorganization under Chapter 11 of
the United States Bankruptcy Code on June 25, 2001. This action
was taken to resolve asbestos claims in a fair and equitable
manner, protect the long-term value of the businesses and
maintain their market leadership positions.
On September 27, 2004, the Third Circuit Court of Appeals
assigned U.S. District Court Judge Joy Flowers Conti to preside
over USG's Chapter 11 cases. Judge Conti replaces U.S. District
Court Judge Alfred M. Wolin, who was removed from USG's cases in
May 2004. Judge Judith K. Fitzgerald remains the bankruptcy
judge presiding over USG's Chapter 11 cases.
USG Corporation is a Fortune 500 company with subsidiaries
that are market leaders in their key product groups: gypsum
wallboard, joint compound and related gypsum products; cement
board; gypsum fiber panels; ceiling panels and grid; and building
products distribution. For more information about USG
Corporation, visit the USG home page at http://www.usg.com
A full-text copy of USG's Third Quarter 2004 Results is
available for free at:
http://sec.gov/Archives/edgar/data/757011/000095013704008990/c89083exv99w1.htm
USG Corporation
Unaudited Consolidated Balance Sheet
As of September 30, 2004
Assets
Current Assets:
Cash and cash equivalents $669,000,000
Short-term marketable securities 129,000,000
Restricted cash 20,000,000
Receivables, net 453,000,000
Inventories 364,000,000
Income taxes receivable 20,000,000
Deferred income taxes 32,000,000
Other current assets 81,000,000
------------
Total current assets $1,768,000,000
Long-term marketable securities 258,000,000
Property, plant and equipment
(net of accumulated depletion -
$892,000,000 & $816,000,000) 1,822,000,000
Deferred income taxes 135,000,000
Goodwill 41,000,000
Other assets 115,000,000
-------------
Total Assets $4,139,000,000
=============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable 248,000,000
Accrued expenses 211,000,000
Current portion of long-term debt 1,000,000
Income taxes payable 23,000,000
-------------
Total current liabilities 483,000,000
Long-term debt 1,000,000
Deferred income taxes 23,000,000
Other liabilities 455,000,000
Liabilities subject to compromise 2,239,000,000
Stockholders' Equity:
Preferred stock -
Common stock 5,000,000
Treasury stock (258,000,000)
Capital received in excess of par value 414,000,000
Accumulated other comprehensive income (loss) 21,000,000
Retained earnings 756,000,000
-------------
Total stockholders' equity 938,000,000
-------------
Total liabilities and stockholders' equity $4,139,000,000
=============
USG Corporation
Unaudited Consolidated Statement of Earnings
Three Months Ended September 30, 2004
Net Sales $1,175,000,000
Cost of products sold 941,000,000
Selling & administrative expenses 82,000,000
Chapter 11 reorganization expenses 4,000,000
-------------
Operating profit 148,000,000
Interest expense 2,000,000
Interest income (2,000,000)
Other expense (income), net -
-------------
Earnings before income taxes and
cumulative effect of accounting change 148,000,000
Income taxes 58,000,000
-------------
Earnings before cumulative effect
of accounting change 90,000,000
Cumulative effect of accounting change,
net of tax -
-------------
Net earnings $90,000,000
=============
USG Corporation
Unaudited Core Business Results
Three Months Ended September 30, 2004
Net Sales:
North American Gypsum:
U.S. Gypsum Company $638,000,000
CGC Inc. (gypsum) 73,000,000
Other subsidiaries 49,000,000
Eliminations (52,000,000)
-------------
Total 708,000,000
Worldwide Ceilings:
USG Interiors, Inc. 118,000,000
USG International 50,000,000
CGC Inc. (ceilings) 12,000,000
Eliminations (12,000,000)
-------------
Total 168,000,000
Building Products Distribution:
L&W Supply Corporation 470,000,000
Eliminations (171,000,000)
-------------
Total USG Corporation $1,175,000,000
=============
Operating Profit:
North American Gypsum:
U.S. Gypsum Company 103,000,000
CGC Inc. (gypsum) 12,000,000
Other subsidiaries 10,000,000
-------------
Total 125,000,000
Worldwide Ceilings:
USG Interiors, Inc. 9,000,000
USG International 4,000,000
CGC Inc. (ceilings) 1,000,000
-------------
Total 14,000,000
Building Products Distribution:
L&W Supply Corporation 31,000,000
Corporate (20,000,000)
Chapter 11 reorganization expenses (4,000,000)
Eliminations 2,000,000
-------------
Total USG Corporation $148,000,000
=============
USG Corporation
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2004
Operating Activities:
Net earnings $227,000,000
Adjustments to reconcile net earnings to net cash:
Cumulative effect of accounting change -
Depreciation, depletion and amortization 83,000,000
Deferred income taxes 44,000,000
(Gain) loss on asset dispositions (1,000,000)
(Increase) decrease in working capital:
Receivables (132,000,000)
Income taxes receivable 6,000,000
Inventories (84,000,000)
Payables 64,000,000
Accrued expenses 5,000,000
(Increase) decrease in other assets (28,000,000)
Increase (decrease) in other liabilities 16,000,000
Change in asbestos receivable 11,000,000
Decrease in liabilities subject to compromise (4,000,000)
Other, net 4,000,000
------------
Net cash provided by operating activities 211,000,000
------------
Investing Activities:
Capital expenditures (80,000,000)
Purchases of marketable securities (361,000,000)
Sales or maturities of marketable securities 210,000,000
Net proceeds from asset dispositions 6,000,000
Acquisition of business (4,000,000)
------------
Net cash used for investing activities (229,000,000)
------------
Financing Activities:
Deposit of restricted cash (13,000,000)
------------
Net cash used for financing activities (13,000,000)
------------
Net (decrease) increase in cash and
cash equivalents (31,000,000)
Cash & cash equivalents, beginning of period 700,000,000
------------
Cash & cash equivalents, end of period $669,000,000
============
Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes. The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094). David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones Day represent the Debtors in their restructuring efforts.
When the Debtors filed for protection from their creditors, they
listed $3,252,000,000 in assets and $2,739,000,000 in debts. (USG
Bankruptcy News, Issue No. 75; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
WESTPOINT STEVENS: Posts $38.5 Mil. of Net Loss in September 2004
-----------------------------------------------------------------
WESTPOINT STEVENS, INC.
Balance Sheet
At September 30, 2004
(in thousands)
Assets
Current Assets
Cash and cash equivalents $4,728
Short-term investments -
Accounts receivable, net 237,913
Inventories 336,122
Prepaid expenses and other current assets 14,857
----------
Total current assets 593,620
Total investments and other assets 120,889
Goodwill -
Property, Plant and Equipment, net 536,639
----------
TOTAL ASSETS $1,251,148
==========
Liabilities and Stockholders' Equity (Deficit)
Liabilities Not Subject to Compromise:
Senior Credit Facility $439,060
DIP Credit Agreement 118,137
Second lien facility 165,000
Accrued interest payable 5,566
Accounts payable - trade 52,993
Accounts payable - intercompany 169,100
Other accrued liabilities 112,930
Deferred income taxes 474
Pension and other liabilities 139,334
----------
Total liabilities not subject to compromise 1,202,594
Liabilities Subject to Compromise
Senior notes 1,000,000
Deferred financing fees (5,276)
Accrued interest payable on Senior Notes 36,130
Accounts payable 26,917
Other payables and accrued liabilities 8,237
Pension and other liabilities 18,807
----------
Total liabilities not subject to compromise 1,084,815
----------
Total Liabilities 2,287,409
Shareholders' Equity (Deficit)
Equity of subsidiaries (123,757)
Common stock 711
Capital surplus/Treasury Stock 51,436
Retained earnings (deficit) (850,798)
Minimum pension liability adjustment (101,921)
Other adjustments (11,932)
Unearned compensation -
----------
Stockholders' Equity (Deficit) (1,036,261)
----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT) $1,251,148
==========
WESTPOINT STEVENS, INC.
Statement of Operations
Month Ended September 30, 2004
(in thousands)
Total sales $115,017
Cost of sales 109,297
----------
Gross profit 5,720
Selling and administrative expenses
Selling expenses 2,146
Warehousing and shipping 5,331
Advertising 410
Division administrative expense 936
MIS expense 1,008
Corporate administrative expense 1,587
----------
Total selling and administrative expense 11,418
Restructuring and impairment charge 10,380
Goodwill impairment charge 7,929
----------
Profit (loss) from operations (24,007)
Interest expense
Interest expense - outside 6,135
Capitalized interest expense -
Interest expense - intercompany 290
Interest income -
Interest income - intercompany -
----------
Net interest expense 6,425
Other expense
Miscellaneous 1,533
Royalties - intercompany 3,700
Transaction gain/loss -
----------
Total other expense 5,233
Other income
Royalties - intercompany -
Dividends -
Sale of assets -
Miscellaneous 9
----------
Total other income 9
----------
Net other expense 5,224
----------
Income (loss) before Chapter 11 reorganization
expenses and income taxes (benefit) and
extraordinary items (35,656)
Chapter 11 reorganization expenses 3,590
Income tax expense (benefit) (713)
Extraordinary item - net of taxes -
----------
Net Income (loss) ($38,533)
==========
WESTPOINT STEVENS, INC.
Statement of Cash Flows
Month Ended September 30, 2004
(in thousands)
Cash flows from operations:
Net income (loss) ($38,533)
Restructuring 7,603
Equity adjustments (2,486)
Depreciation and amortization expense 15,604
Fixed asset impairment charge 7,929
Working Capital Changes
Decrease/(increase) - accounts receivable 18,168
Decrease/(increase) - inventories 11,075
Decrease/(increase) - other current assets 2,751
Decrease/(increase) - other non-current
assets & debts 1,367
Increase/(decrease) - accounts payable (trade) (1,797)
Increase/(decrease) - a/p (intercompany) 3,233
Increase/(decrease) - accrued liabilities 2,707
Increase/(decrease) - accrued interest payable (759)
Increase/(decrease) - pension and other liabilities (5,000)
Increase/(decrease) - deferred federal income tax (3,957)
----------
Total cash flows from operations 17,905
Cash flows from investing activities:
Capital expenditures (725)
Transfers -
Net proceeds from sale of assets 565
----------
Total cash flows from investing (160)
Cash flows from financing activities:
Increase/(decrease)- DIP Credit Agreement (15,596)
----------
Total cash flows from financing (15,596)
Beginning cash balance 2,579
Change in cash 2,149
----------
Ending cash balance $4,728
==========
Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on June 1,
2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq.,
at Weil, Gotshal & Manges, LLP, represents the Debtors in their
restructuring efforts. (WestPoint Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
WESTPOINT STEVENS: 3rd Quarter Net Loss Balloons to $52.6 Million
-----------------------------------------------------------------
WestPoint Stevens Inc. reported results for the third quarter
ended Sept. 30, 2004.
The Company's net sales for the third quarter of 2004 decreased
6.5% to $416.1 million compared with $445.2 million a year ago.
Bed Product sales decreased 4.5% and Bath Product sales decreased
4.4% due to slower retail sales at department stores, national
chains and warehouse clubs which more than offset gains with mass
merchants and specialty stores. Other (Mill Stores and
International) sales decreased, primarily from a reduction in the
Company's mill store sales as a result of restructuring
initiatives that have reduced the total number of retail stores to
36 from 57 in the year ago period. Furthermore, one of the
Company's foreign subsidiaries, WestPoint Stevens (Europe) Ltd.,
filed for bankruptcy in the United Kingdom in August of 2003 and
is in the process of liquidating. WestPoint Stevens Stores' same-
store sales decreased 0.8% for the remaining stores in the third
quarter of 2004 versus the year ago period due to severe weather
that impacted store sales in coastal locations.
Net income for the third quarter of 2004 was a loss of
$52.6 million, compared with a loss of $12.8 million in 2003.
Loss before taxes for the third quarter of 2004 was $54.0 million
compared with a loss before taxes in 2003 of $16.0 million.
Included in the third quarter of 2004 were $14.1 million in
expenses related to the Company's restructuring initiatives, $7.9
million in charges related to fixed asset impairments, and $7.2
million in expenses related to the current bankruptcy proceedings
compared with $8.7 million in expenses in the third quarter of
2003 related to WestPoint Stevens previously announced
restructuring initiatives and $12.7 million in expenses related to
the current bankruptcy proceedings.
M. L. "Chip" Fontenot, WestPoint Stevens President and CEO
commented, "The retail environment continued to be challenging
for home fashions in the third quarter as retailers experienced
slower sales growth in textile home furnishings. Nevertheless,
we increased our market share with targeted key accounts and
received positive retailer response during our recent Fall Market.
Furthermore, we remain adequately funded with availability under
our $300 million debtor-in-possession facility of $146 million at
the end of the third quarter."
Mr. Fontenot continued, "We have completed our revised Business
Plan and are in final negotiations with our creditors regarding
our exit from bankruptcy. We are hopeful this process will be
concluded in the first quarter of 2005. On September 28, the
Company received an additional extension of its exclusive period
to file a plan of reorganization through December 1, 2004."
WestPoint Stevens Inc. is the nation's premier home fashions
consumer products marketing company, with a wide range of bed
linens, towels, blankets, comforters and accessories marketed
under the well-known brand names GRAND PATRICIAN, PATRICIAN,
MARTEX, ATELIER MARTEX, BABY MARTEX, UTICA, STEVENS, LADY
PEPPERELL, SEDUCTION, VELLUX and CHATHAM - all registered
trademarks owned by WestPoint Stevens Inc. and its subsidiaries -
and under licensed brands including RALPH LAUREN HOME, DISNEY
HOME and GLYNDA TURLEY. WestPoint Stevens can be found on the
World Wide Web at http://www.westpointstevens.com/
A full-text copy of WestPoint Stevens' Third Quarter 2004
Report is available for free at the Securities and Exchange
Commission at:
http://www.sec.gov/Archives/edgar/data/852952/000085295204000018/wpst093010-q.htm
WESTPOINT STEVENS, INC.
Condensed Consolidated Balance Sheets
At September 30, 2004
Assets
Current Assets
Cash and cash equivalents $8,698,000
Accounts receivable, net 247,913,000
Inventories, net 369,711,000
Prepaid expenses and other current assets 15,331,000
--------------
Total current assets 641,653,000
Property, Plant and Equipment, net 552,069,000
Other Assets
Deferred financing fees, net 3,090,000
Other assets 712,000
--------------
TOTAL ASSETS $1,197,524,000
==============
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
Senior Credit Facility $484,749,000
Second-Lien Facility 165,000,000
DIP Credit Agreement 118,137,000
Accrued interest payable 5,566,000
Accounts payable 54,453,000
Other accrued liabilities 135,078,000
-------------
Total current liabilities 962,983,000
Noncurrent Liabilities
Deferred income taxes 474,000
Pension and other liabilities 142,779,000
-------------
Total noncurrent liabilities 143,253,000
Liabilities Subject to Compromise 1,087,889,000
Stockholders' Equity (Deficit) (996,601,000)
-------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,197,524,000
=============
WESTPOINT STEVENS, INC.
Condensed Consolidated Statements of Income
Three Months Ended September 30, 2004
Net sales $416,100,000
Cost of goods sold 367,212,000
-------------
Gross earnings (loss) 48,888,000
Selling, general and administrative expenses 54,059,000
Restructuring and impairment charge 10,380,000
Fixed asset impairment charge 7,929,000
Goodwill impairment charge -
-------------
Operating earnings (loss) (23,480,000)
Interest expense 19,822,000
Other expense-net 3,441,000
Chapter 11 expenses 7,242,000
-------------
Income (loss) before income tax expense (benefit) (53,985,000)
Income tax expense (benefit) (1,346,000)
-------------
Net income (loss) ($52,639,000)
=============
WESTPOINT STEVENS, INC.
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2004
Cash flows from operating activities:
Net loss ($91,512,000)
Adjustments to reconcile net loss to net cash
provided by (used for) operating activities:
Depreciation and other amortization 59,625,000
Deferred income taxes (16,804,000)
Changes in working capital 19,525,000
Other-net 592,000
Non-cash component of restructuring
and impairment charge 9,421,000
Fixed asset impairment charge 7,929,000
Goodwill impairment charge -
-------------
Net cash used for operating activities (11,224,000)
Cash flows from investing activities:
Capital expenditures (14,257,000)
Net proceeds from sale of assets 7,339,000
-------------
Net cash used for investing activities (6,918,000)
Cash flows from financing activities:
Senior Credit Facility:
Borrowings -
Repayments (5,940,000)
DIP Credit Agreement:
Borrowings 603,120,000
Repayments (574,000,000)
Fees associated with DIP Credit Agreement -
Trade Receivables Program -
-------------
Net cash provided by financing activities 23,180,000
Net increase in cash and cash equivalents 5,038,000
Cash and cash equivalents at beginning of period 3,660,000
-------------
Cash and cash equivalents at end of period $8,698,000
=============
Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on June 1,
2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq.,
at Weil, Gotshal & Manges, LLP, represents the Debtors in their
restructuring efforts. (WestPoint Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
WESTPOINT STEVENS: WP Stevens I Posts $4.1 Mil. Income in Sept.
---------------------------------------------------------------
WESTPOINT STEVENS, INC., I
Balance Sheet
At September 30, 2004
(in thousands)
Assets
Current Assets
Cash and cash equivalents $35
Accounts receivable - intercompany 15,054
Inventories 10,283
Prepaid expenses and other current assets -
--------
Total current assets 25,372
Total investments and other assets 124,052
Property, Plant and Equipment, net 12,239
Goodwill -
---------
TOTAL ASSETS $161,663
=========
Liabilities and Stockholders' Equity (Deficit)
Liabilities Not Subject to Compromise
Senior Credit Facility -
DIP Credit Agreement -
Long-term debt classified as current -
Accrued interest payable -
Accounts payable - trade $896
Accounts payable - intercompany -
Other accrued liabilities 11,439
Deferred income taxes -
Pension and other liabilities -
---------
Total Liabilities Not Subject to Compromise 12,335
Liabilities Subject to Compromise
Senior notes -
Deferred financing fees -
Accrued interest payable on Senior Notes -
Accounts payable 1,400
Other payables and accrued liabilities -
Pension and other liabilities -
---------
Total Liabilities Subject to Compromise 1,400
---------
Total Liabilities 13,735
Shareholders' Equity (Deficit)
Equity of subsidiaries -
Common stock 1
Capital surplus/Treasury Stock 70,559
Retained earnings (deficit) 77,368
Minimum pension liability adjustment -
Other adjustments -
Unearned compensation -
---------
Shareholders' Equity (Deficit) 147,928
---------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT) $161,663
=========
WESTPOINT STEVENS, INC., I
Statement of Operations
Month Ended September 30, 2004
(in thousands)
Net sales $8,282
Cost of goods sold 5,402
---------
Gross earnings 2,880
Selling and administrative expenses
Selling expenses 1
Warehousing and shipping 225
Advertising -
Division administrative expense -
MIS expense -
Corporate administrative expense 170
---------
Total selling and administrative expense 396
Restructuring and impairment charge -
Goodwill impairment charge -
---------
Operating earnings (loss) 2,484
Interest expense
Interest expense - outside -
Capitalized interest expense -
Interest expense - intercompany -
Interest income -
Interest income - intercompany 357
---------
Net interest expense (357)
Other expense
Miscellaneous -
Royalties - intercompany 190
Transaction gain/loss -
---------
Total other expense 190
Other income
Royalties - intercompany 3,700
Dividends -
Sale of assets -
Miscellaneous -
---------
Total other income 3,700
---------
Net other expense (3,510)
---------
Income (loss) before Chapter 11 reorganization
expenses and income taxes (benefit) and
extraordinary items 6,351
Chapter 11 reorganization expenses -
Income tax expense (benefit) 2,226
Extraordinary item - net of taxes -
---------
Net Income (loss) $4,125
=========
WESTPOINT STEVENS, INC., I
Statement of Cash Flows
Month Ended September 30, 2004
(in thousands)
Cash flows from operations:
Net income (loss) $4,125
Non-cash items
Depreciation and amortization 111
Working Capital Changes
Decrease/(increase) - a/r (customers) -
Decrease/(increase) - a/r (intercompany) (3,423)
Decrease/(increase) - inventories 1,610
Decrease/(increase) - other current assets (370)
Decrease/(increase) - other non-current assets -
Increase/(decrease) - accounts payable (trade) (311)
Increase/(decrease) - a/p (intercompany) -
Increase/(decrease) - accrued liabilities (1,963)
Increase/(decrease) - accrued interest payable -
Increase/(decrease) - pension & other liabilities -
Increase/(decrease) - deferred federal income tax -
---------
Total cash flows from operations (221)
Cash flows from investing activities:
Capital expenditures 16
Transfers -
Net proceeds from sale of assets -
---------
Total cash flows from investing 16
Cash flows from financing activities:
Increase/(decrease)- DIP Credit Agreement -
---------
Total cash flows from financing -
Beginning cash balance 240
Change in cash (205)
---------
Ending cash balance $35
=========
Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on June 1,
2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq.,
at Weil, Gotshal & Manges, LLP, represents the Debtors in their
restructuring efforts. (WestPoint Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
WESTPOINT STEVENS: JP Stevens Enterprises' Sept. Operating Report
-----------------------------------------------------------------
J.P. STEVENS ENTERPRISES, INC.
Balance Sheet
At September 30, 2004
(in thousands)
Assets
Current Assets
Cash and cash equivalents $15
Accounts receivable - intercompany 16,580
Prepaid expenses and other current assets -
--------
Total current assets 16,595
Total investments & other assets -
Goodwill -
--------
TOTAL ASSETS $16,595
========
Liabilities and Stockholders' Equity (Deficit)
Liabilities Not Subject to Compromise:
Accounts payable - intercompany -
Other accrued liabilities $181
Deferred income taxes -
Pension and other liabilities -
--------
Total Liabilities Not Subject to Compromise 181
Liabilities Subject to Compromise -
--------
Total Liabilities 181
Shareholders' Equity (Deficit)
Equity of subsidiaries -
Common stock 2
Capital surplus/Treasury Stock -
Retained earnings (deficit) 16,412
Minimum pension liability adjustment -
Other adjustments -
Unearned compensation -
--------
Stockholders' Equity (Deficit) 16,414
--------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT) $16,595
========
J.P. STEVENS ENTERPRISES, INC.
Statement of Operations
Month Ended September 30, 2004
(in thousands)
Net sales -
Cost of goods sold -
--------
Gross earnings -
Selling and administrative expenses
Selling expenses $1
Warehousing and shipping -
Advertising -
Division administrative expense -
MIS expense -
Corporate administrative expense -
--------
Total selling and administrative expense 1
Restructuring and impairment charge -
Goodwill impairment charge -
--------
Operating earnings (loss) (1)
Interest expense
Interest expense - outside -
Capitalized interest expense -
Interest expense - intercompany -
Interest income -
Interest income - intercompany 65
--------
Net interest expense (65)
Other expense
Miscellaneous -
Royalties - intercompany -
Transaction gain/loss -
--------
Total other expense -
Other income
Royalties - intercompany 190
Dividends -
Sale of assets -
Miscellaneous -
--------
Total other income 190
--------
Net other expense (190)
--------
Income (loss) before Chapter 11 reorganization
expenses and income taxes (benefit) and
extraordinary items 254
Chapter 11 reorganization expenses -
Income tax expense (benefit) 89
Extraordinary item - net of taxes -
--------
Net Income (loss) $165
========
J.P. STEVENS ENTERPRISES, INC.
Statement of Cash Flows
Month Ended September 30, 2004
(in thousands)
Cash flows from operations:
Net income (loss) $165
Non-cash items
Depreciation and amortization -
Working Capital Changes
Decrease/(increase) - a/r (intercompany) 1
Decrease/(increase) - inventories -
Decrease/(increase) - other current assets -
Decrease/(increase) - other non-current assets -
Increase/(decrease) - accounts payable (trade) -
Increase/(decrease) - a/p (intercompany) -
Increase/(decrease) - accrued liabilities (177)
Increase/(decrease) - accrued interest payable -
Increase/(decrease) - pension & other liabilities -
Increase/(decrease) - deferred federal income tax -
--------
Total cash flows from operations (11)
Cash flows from investing activities
Capital expenditures -
Net proceeds from sale of assets -
--------
Total cash flows from investing -
Cash flows from financing activities
Increase/(decrease)- DIP Credit Agreement -
--------
Total cash flows from financing -
Beginning cash balance 26
Change in cash (11)
--------
Ending cash balance $15
========
Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on June 1,
2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq.,
at Weil, Gotshal & Manges, LLP, represents the Debtors in their
restructuring efforts. (WestPoint Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
WESTPOINT STEVENS: JP Stevens & Co.'s Sept. 2004 Operating Report
-----------------------------------------------------------------
J.P. STEVENS & CO., INC.
Balance Sheet
At September 30, 2004
(in thousands)
Assets
Current Assets
Cash and cash equivalents -
Accounts receivable - intercompany $110,749
Prepaid expenses and other current assets -
---------
Total current assets 110,749
Total investments & other assets 2,697
Goodwill -
---------
TOTAL ASSETS $113,446
=========
Liabilities and Stockholders' Equity (Deficit)
Liabilities Not Subject to Compromise
Accounts payable - intercompany -
Other accrued liabilities -
Deferred income taxes -
Pension and other liabilities -
---------
Total Liabilities Not Subject to Compromise -
Liabilities Subject to Compromise -
Shareholders' Equity (Deficit)
Equity of subsidiaries $10,503
Common stock -
Capital surplus/Treasury Stock -
Retained earnings (deficit) 102,943
Minimum pension liability adjustment -
Other adjustments -
Unearned compensation -
---------
Stockholders' Equity (Deficit) 113,446
---------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT) $113,446
=========
J.P. Stevens & Co., Inc., reports no income and cash flow for
September 2004.
Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on June 1,
2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq.,
at Weil, Gotshal & Manges, LLP, represents the Debtors in their
restructuring efforts. (WestPoint Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
WESTPOINT STEVENS: WP Stevens Stores' Sept. 2004 Operating Report
-----------------------------------------------------------------
WESTPOINT STEVENS STORES, INC.
Balance Sheet
At September 30, 2004
(in thousands)
Assets
Current Assets
Cash and cash equivalents $1,067
Accounts receivable - customers 171
Accounts receivable - intercompany 5,692
Total Inventories 21,264
Prepaid expenses and other current assets 748
--------
Total current assets 28,942
Total investments & other assets -
Goodwill -
Property, plant and equipment, net 2,373
--------
TOTAL ASSETS $31,315
========
Liabilities and Stockholders' Equity (Deficit)
Liabilities Not Subject to Compromise
Accounts payable - trade $638
Accounts payable -intercompany -
Other accrued liabilities 5,443
Deferred income taxes -
Pension and other liabilities -
--------
Total Liabilities Not Subject to Compromise 6,081
--------
Liabilities Subject to Compromise
Accounts payable 1,674
--------
Total Liabilities 1,674
Shareholders' Equity (Deficit)
Equity of subsidiaries -
Common stock 1
Capital surplus/Treasury Stock 15,955
Retained earnings (deficit) 7,604
Minimum pension liability adjustment -
Other adjustments -
Unearned compensation -
--------
Stockholders' Equity (Deficit) 23,560
--------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY (DEFICIT) $31,315
========
WESTPOINT STEVENS STORES, INC.
Statement of Operations
Month Ended September 30, 2004
(in thousands)
Net sales $6,003
Cost of goods sold 3,611
--------
Gross earnings 2,392
Selling and administrative expenses
Selling expenses 2,024
Warehousing and shipping 196
Advertising 217
Division administrative expense 246
MIS expense 56
Corporate administrative expense 82
--------
Total selling and administrative expense 2,821
Restructuring and impairment charge -
Goodwill impairment charge -
--------
Operating earnings (loss) (429)
Interest expense
Interest expense - outside -
Capitalized interest expense -
Interest expense - intercompany 155
Interest income -
Interest income - intercompany -
--------
Net interest expense 155
Other expense
Miscellaneous -
Royalties - intercompany -
Transaction gain/loss -
--------
Total other expense -
Other income
Royalties Intercompany -
Dividends -
Sale of assets -
Miscellaneous -
--------
Total other income -
--------
Net other expense -
--------
Income (loss) before Chapter 11 reorganization
expenses and income taxes (benefit) and
extraordinary items (584)
Chapter 11 reorganization expenses -
Income tax expense (benefit) (204)
Extraordinary item - net of taxes -
--------
Net Income (loss) ($380)
========
WESTPOINT STEVENS STORES, INC.
Statement of Cash Flows
Month Ended September 30, 2004
(in thousands)
Cash flows from operations:
Net income (loss) ($380)
Non-cash items
Depreciation and amortization 54
Gain on sale of assets -
Working Capital Changes
Decrease/(increase) - a/r (customers) 30
Decrease/(increase) - a/r (intercompany) 217
Decrease/(increase) - inventories (1,222)
Decrease/(increase) - other current assets 107
Decrease/(increase) - other non-current assets -
Increase/(decrease) - accounts payable (trade) 236
Increase/(decrease) - a/p (intercompany) -
Increase/(decrease) - accrued liabilities 424
Increase/(decrease) - accrued interest payable -
Increase/(decrease) - pension & other liabilities -
Increase/(decrease) - deferred federal income tax -
--------
Total cash flows from operations (534)
Cash flows from investing activities
Capital expenditures -
Transfers -
Net proceeds from sale of assets -
--------
Total cash flows from investing -
Cash flows from financing activities
Increase/(decrease)- DIP Credit Agreement -
--------
Total cash flows from financing -
Beginning cash balance 1,601
Change in cash (534)
--------
Ending cash balance $1,067
========
Headquartered in West Point, Georgia, WestPoint Stevens, Inc., --
http://www.westpointstevens.com/-- is the #1 US maker of bed
linens and bath towels and also makes comforters, blankets,
pillows, table covers, and window trimmings. It makes the Martex,
Utica, Stevens, Lady Pepperell, Grand Patrician, and Vellux
brands, as well as the Martha Stewart bed and bath lines; other
licensed brands include Ralph Lauren, Disney, and Joe Boxer.
Department stores, mass retailers, and bed and bath stores are its
main customers. (Federated, J.C. Penney, Kmart, Sears, and Target
account for more than half of sales.) It also has nearly 60 outlet
stores. Chairman and CEO Holcombe Green controls 8% of WestPoint
Stevens. The Company filed for chapter 11 protection on June 1,
2003 (Bankr. S.D.N.Y. Case No. 03-13532). John J. Rapisardi, Esq.,
at Weil, Gotshal & Manges, LLP, represents the Debtors in their
restructuring efforts. (WestPoint Bankruptcy News, Issue No. 32;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
*********
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*********
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