Flooring News and Information

Greensboro, NC, Nov. 15— Burlington Industries had a net loss of $76.7 million or $1.46 per share for its fourth quarter ended September 30, compared to a net loss of $523.7 million or $10.05 per share in the same quarter last year. Both the fourth quarter and fiscal year 2000 and 2001 include significant items which make comparisons difficult, such as amortization of goodwill, joint venture results, gains on asset sales and other income, curtailment costs resulting from managed inventory reductions and restructuring and runout costs related to restructuring.

The fourth quarter results include, among other things, $65.5 million after tax, or $1.25 per share, of restructuring and runout expenses.

Net sales for the fourth quarter were $327.1 million, compared with $427.2 million in the fourth quarter last year. Approximately $57 million of the sales reduction relates to businesses sold or closed during the fiscal year.

For the full fiscal year 2001, there was a net loss of $91.1 million, or $1.73 per share, compared with a net loss of $527.0 million, or $10.12 per share last year. Fiscal year 2001 results include among other things, the net effect of the following items on an after tax basis: $72.6 million, or $1.38, restructuring and runout expenses; $8.0 million, or $0.15 per share, gains from asset sales and interest income related to a Mexican value added tax refund.

Net sales for the year were $1.4 billion compared with $1.6 billion for last year. Approximately $139 million of the sales reduction relates to businesses sold or closed in the fiscal year.

Operational restructuring will continue in 2002, with additional capacity reductions, product rationalization and related asset sales. Restructuring charges and runout expenses of $65.5 million, after tax, were recorded in September. Additional restructuring charges are anticipated in 2002 as the restructuring is completed. The cash impact of restructuring in 2002 is expected to be slightly positive.

COO Douglas J. McGregor said, "2001 was a difficult year caused by continued economic decline and slowing retail activity. Despite these conditions, we were able to achieve significant working capital reductions, including $71 million reduction in inventories from a year ago. Improvements in our operations and asset sales generated substantial cash, which provided us the flexibility to pay down debt and initiate other restructuring activities. The company has approximately $60 million cash on hand as of today.

"Our restructuring efforts have included reducing our capacities as demand declined and exiting several low-margin product lines. We will continue to review our capacities in light of continued economic uncertainty in order to maintain lower inventories and increase profitability."

"Our earnings results for 2001 were disappointing,” said chairman George W. Henderson, III. “We experienced continued slowing in the fourth quarter and began taking the necessary restructuring actions. The general outlook since September has worsened and we can no longer afford the time needed to incrementally transition our company. For this reason, we took the difficult, but necessary, action today to file voluntary petitions for reorganization. Our working capital and operational improvements achieved this year have provided us sufficient liquidity to pursue the aggressive actions necessary to return the company to a sound financial position."